Sky cleared to buy Prime despite TVNZ's objections

Craig Boyce

The Commerce Commission has approved Sky Television's purchase of free-to-air station Prime New Zealand, saying the deal would not lessen competition in the local market.

In a short statement after the stock market closed yesterday, the regulator cleared the $30.3 million deal.

"The commission was satisfied that the proposed acquisition would not have, or would not be likely to have, the effect of substantially lessening competition in any of the relevant markets," the statement said.

Sky, which will buy Prime from its Australian parent, estimates the combined entity will give it 26 per cent of the country's audience and 11 per cent of total advertising revenue.

Sky chief executive John Fellet said that while "pleased" with the regulator's decision, it didn't come as a "radical surprise".

Had the commission denied the purchase, Mr Fellet said Sky would have entered the free-to-air market regardless by un-encrypting one of its existing signals.

He predicted that it would be six to 12 months before viewers saw any "radical changes" at Prime.

Late last month TVNZ asked the regulator to stop Sky from buying Prime, citing shrinking competition as its main reason.

Yesterday, TVNZ's board chairman, Craig Boyce, called the decision "disappointing".

"TVNZ provided the commission with a comprehensive submission setting out its concerns about the impact on free-to-air broadcasting in New Zealand if the purchase went ahead," he said.

TVNZ promised to comment further after the commission releases its full written decision, which is expected soon.