SYDNEY, Sept 14 (Reuters) - A proposal by Rupert Murdoch's cable TV firm Foxtel to buy 15 percent of struggling broadcaster Ten Network Holdings Ltd TEN.AX may hurt competition, an Australian antitrust regulator said, in a sign that it may block the A$77 million share sale.
Failure to clinch a deal would require loss-making Ten to recommence its search for a financial lifeline as it trails larger rivals Seven West Media Ltd SWM.AX and Nine Entertainment Co Holdings Ltd NEC.AX in the ratings and as more free-to-air viewers opt for streaming services like Netflix Inc NFLX.O . ID:nL3N0Z11BG
A key sticking point is the TV rights to big sporting events.
Although Australian law prevents pay TV companies from buying exclusive broadcast rights to certain sports matches, the Australian Competition and Consumer Commission (ACCC) is worried that the proposal by Foxtel, of which Murdoch's News Corp NWSA.O owns half, may make Foxtel less willing to negotiate with other TV networks.
The deal "may increase the likelihood of Ten and Foxtel entering into joint bids and other commercial arrangements for acquisition of sports rights, to the exclusion of other free-to-air networks", ACCC chairman Rod Sims said in a statement on Monday.
Ten said in a statement that it believes the proposal will increase competition in relevant markets.
The ACCC noted that Murdoch's son, Lachlan Murdoch, owns 8.5 percent of Ten and is executive co-chairman and a likely shareholder of News Corp, saying "if the interests of Foxtel and Mr Murdoch are aligned, this would be in effect the largest shareholding block in Ten".
The regulator will make a final ruling on Oct. 22.
Ten shares climbed above Foxtel's proposed 15 cent acquisition price, rising 1 cent to 17.5 cents. The stock is still down a third from a June 12 peak.