Casey Cablevision & Virgin Media Limited

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Roinn Cumarsaide, Gnfomhaithe ar son na hAeraide & Comhshaoil Department ofCommunications , Climate Action & Environment

Casey Cablevision & Virgin Media Limited Phase One Examination Report

1 August 2018 Table of Contents

Table of Contents ...... i

1. Terms ...... 1

2. Background ...... 2

The Purchaser: ...... 2

The Target: ...... 2

Media Sector ...... 2

The Purchaser: ...... 4

The Target: ...... 4

3. Application of the Relevant Criteria & s. 28D (2) of the Competition Act 5

Significant Interests ...... 5

The Purchaser: ...... 6

Other Interests of Mr John Malone: ...... 6

Other Interests of Liberty Global ...... 6

The Target: ...... 6

Impact: ...... 7

Relevant Media Assets ...... 8

The Purchaser: ...... 8

Discovery: ...... 8

The Target: ...... 8

Impact: ...... 8

Ownership and Control ...... 9

Relevant Media Assets: ...... 9

Regulatory Oversight: ...... 9

Proposed Changes: ...... 10

Impact: ...... 10

Media Merger – Parties; Examination - i - Market Share ...... 10

Tables: ...... 11

The Purchaser: ...... 15

Discovery: ...... 16

The Target: ...... 16

Brand & News Reach: ...... 16

The Views of the Parties: ...... 16

Impact: ...... 17

Governance and Editorial Management ...... 18

Compliance and Ethics ...... 19

Editorial Ethos ...... 19

Impact ...... 19

Content – Diversity ...... 20

The Purchaser ...... 20

The Target ...... 22

Alternative Content ...... 22

The Views of the Parties ...... 22

Impact ...... 22

Financial ...... 22

The Purchaser: ...... 22

The Target: ...... 23

The Views of the Parties ...... 23

Impact: ...... 23

Impact on the Irish Language ...... 24

Impact: ...... 24

The scale and reach of RTÉ and TG4 ...... 24

Impact: ...... 24

The Views of the CCPC ...... 24

Media Merger – Parties; Examination - ii - The Views of the Undertakings Involved ...... 25

4. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ...... 26

5. Conclusion...... 30

Media Merger – Parties; Examination - iii - 1. Terms

1.1 Liberty Global plc and its subsidiaries (Liberty Global)

1.2 Virgin Media Limited (Virgin Media) (Purchaser)

1.3 PBN Holdings Limited and its subsidiary Casey Cablevision Limited (Casey Cable) (Target)

1.4 Virgin Media and Casey Cable (Parties)

1.5 The proposed media merger (the proposed transaction)

1.6 The Competition Act, 2002, as amended (the Competition Act)

1.7 Discovery Communications, Inc. ( Discovery)

1.8 Pat Casey, Noelle Casey and Bill Casey (Casey Family)

Media Merger – Liberty Global; Casey Cable - 1 - 2. Background

The proposed transaction involves the acquisition of sole control of the Target by the Purchaser.1

2.1 The proposed transaction is to be implemented in accordance with the Sale and Purchase Agreement dated 24 May 2018 between the Parties. Pursuant to this agreement, the Purchaser would acquire the full legal and

beneficial ownership of the entire issued share capital of the Target.2

The Purchaser:

2.2 The Purchaser is a private limited liability company incorporated under the Laws of England and Wales.3 It is wholly owned by Liberty Global Europe 2 Limited which is ultimately wholly owned by Liberty Global plc.

2.3 The Purchaser is active in the broadcasting sector in the State through the operation of a number of television channels and a television broadcasting platform. It is also active in the internet media sector though an on- demand service containing substantial amounts of comment on news and current affairs.4

The Target:

2.4 The Target is a private limited liability company, incorporated under the laws of the State, based in Dungarven, Co. Waterford. It is active in broadcasting sector in the State through the provision of a television broadcasting platform.5

Media Sector

2.5 Media Mergers, as defined in s. 28A of the Competition Act 2002 (as amended) (the Competition Act), refers to those undertakings which “carry on a media business” in the State. A “media business” is defined in the Competition Act as follows:

1 Liberty Global/ Casey Cable, Media Merger Notification Form, p. 1 2 Liberty Global/Case Cable, Annex 4, Agreement for the Sale and Purchase of the Share Capital of P.B.N. Holdings Limited, 24 May 2018 3 Liberty Global/Casey Cable, Annex 4, Agreement for the Sale and Purchase of the Share Capital of P.B.N. Holdings Limited, 24 May 2018, p. 1 4 Liberty Global/Casey Cable, Media Merger Notification Form, p. 3 5 Liberty Global/Casey, Cable Media Merger Notification Form, p. 4

Media Merger – Liberty Global; Casey Cable - 2 - (a) ‘media business’ means the business (whether all or part of an undertaking’s business) of—

(b) the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet,

(d) providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or

(e) making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material;

2.6 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides the following supplementary definition of a “media sector”:

(a) ‘media sector’ means one of the following (and ‘media sectors’ means one or more of the following collectively):

(b) Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same.

(c) Broadcasting – transmitting, re-transmitting or relaying a broadcast service including radio or television and the production of content for same.

(d) Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs.

2.7 Furthermore, the Guidelines also note a number of sectors, these being television, radio, print media, internet, [and] other media interests, on the basis of which cross-media interests can be considered.

Media Merger – Liberty Global; Casey Cable - 3 - 2.8 The Guidelines provide a working method of grouping media business, as defined in the Competition Act, in order to facilitate the examination of notified media mergers. The guidance provided by the Guidelines in this area is not exhaustive and does not preclude the examination of sub- sectors of the media sectors identified or other relevant groupings of media businesses.

The Purchaser:

2.9 The Purchaser is active in:

(a) The Broadcasting Sector through the transmission, re- transmission or relaying a broadcasting service, including the operation of the commercial television network, TV3 group, and its four television channels, TV3, TV3+1, 3e and Be3, and the Virgin Media television broadcasting platform, over which it offers a pay- TV service.

(b) The Internet Media Sector through the making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, including on the on-demand and live streaming channel, 3player.

The Target:

2.10 The Target is active in the Broadcasting Sector through the provision of a

television broadcasting platform, over which it offers a pay-tv service.6

6 Liberty Global/Casey Cable, Media Merger Notification Form, p. 4

Media Merger – Liberty Global; Casey Cable - 4 - 3. Application of the Relevant Criteria & s. 28D (2) of the Competition Act

Significant Interests

3.1 In accordance with Section 28L of the Competition Act 2002, the Guidelines provide a definition of what constitutes a significant interest in a media business – which it states means “[h]as sufficient voting, financial or ownership strength within the relevant media business or media businesses to influence directly or indirectly, to an appreciable extent, the direction or policy of the media business or media businesses with regard in particular to news, current affairs or cultural content. This includes sourcing, production, supply or delivery of such content”. This definition further includes indicative thresholds as to what constitutes a significant interest in entities that carry on media businesses in the State, including that:

(a) A holding or voting strength of between 10% and 19% (directly or indirectly) may constitute a significant interest.

(b) A holding or voting strength of more than 20% (directly or indirectly) will generally constitute a significant interest.

3.2 The definition of “plurality of the media” is provided in the Competition Act and includes both diversity of ownership and diversity of content, both of which are also defined in the Act, as reproduced below:

(a) Diversity of content – “means the extent to which the broad diversity of views (including diversity of views on news and current affairs) and diversity of cultural interests prevalent in Irish society is reflected through the activities of media businesses in the State including their editorial ethos, content and sources”.

Media Merger – Liberty Global; Casey Cable - 5 - (b) Diversity of ownership – “means the spread of ownership and control of media businesses in the State linked to the market share of those media businesses as measured by listenership, readership, reach or other appropriate measures”.

The Purchaser:

3.3 Liberty Global is the ultimate parent company of and wholly owns the

Purchaser.7 Therefore, it has a significant interest in the Purchaser.

(a) One shareholder has a shareholding in excess of 10% in Liberty

Global, as follows: Mr John Malone – 28.1% (voting power).8

3.4 In addition to his stockholding, Mr John Malone is chairman of the

Liberty Global Board.9

3.5 Therefore, Mr John Malone has a significant interest in Liberty Global and, as Liberty Global wholly owns the Purchaser, in the Purchaser.

Other Interests of Mr John Malone:

3.6 Mr John Malone also has a significant interest in Discovery Communications, Inc. (Discovery). This significant interest relates to a

shareholding equating to 28% of the voting power in Discovery.10

Other Interests of Liberty Global

3.7 On 31 May 2018, Liberty Global held a shareholding of less than 10% in

ITV plc.11 The indicative thresholds for determining significant interests in media businesses state that “holding or voting strength of between 10% and 19% may constitute a significant interest”. This does not preclude interests below 10% from being considered significant interests. However, for the purposes of this examination, this shareholding is not considered to constitute a significant interest.

The Target:

7 Liberty Global/Casey Cable, Media Merger Notification Form, p. 11 8 Liberty Global/Casey Cable, Media Merger Notification Form, p. 11 9 Liberty Global/Casey Cable, Media Merger Notification Form, p. 12 10 Discovery, Annual Report 2017, Form 10-K, p. 27 11 Liberty Global/Casey Cable, Media Merger Notification Form, p. 4

Media Merger – Liberty Global; Casey Cable - 6 - 3.8 The Target is wholly equally by the Casey Family through P.B.N. Holdings

Limited.12 Therefore, the Casey Family has a significant interest in the Target.

Impact:

3.9 As can be seen from the above, there are two entities that have a significant interest in the Purchaser:

(a) Liberty Global, and,

(b) John Malone.

3.10 As can be seen from the above, John Malone also has a significant interest in Discovery.

3.11 As can be seen from the above, the Casey Family has a significant interest in the Target. However, as this significant interest will be extinguished should the proposed transaction proceed it will not be considered further in this examination.

3.12 Therefore, should the proposed transaction proceed, both Liberty Global and Mr John Malone will gain a significant interest in the Target.

3.13 It should be noted that significant interests within a media business or a range of media businesses do not necessarily constitute a significant interest in a media sector or across media sectors. While the Guidelines provide a definition of what constitutes a significant interest in a media business, the relevant criteria in the Competition Act specifies the consideration of significant interests in and across media sectors. Therefore, there are two separate concepts of significant interests considered in media merger examinations and thus in this examination, those in media businesses and those in media sectors.

3.14 Therefore, whether Liberty Global and Mr John Malone acquiring a significant interests in the Target is concerning to the State and if it will have an adverse impact on the plurality of the media in the State will be

12 Liberty Global/Casey Cable, Annex 7, Casey Cablevision Structure

Media Merger – Liberty Global; Casey Cable - 7 - assessed, in accordance with the relevant provisions of the 2002 Act and the Guidelines, in terms of the remainder of the indicators in this examination, particularly Relevant Media Assets, Ownership and Control, Market Share, Governance and Editorial Management and the Views of the CCPC.

Relevant Media Assets

3.15 Relevant media asset is defined by the Guidelines as “holdings which constitute a significant interest in an undertaking (other than an undertaking party to the merger) that carries on a media business in a media sector(s) in the State, and which are held either by an undertaking party to the merger or by a natural or legal person with a significant interest in an undertaking party to the merger”.

The Purchaser:

3.16 The Purchaser operates the following relevant media assets:

(a) The four TV channels of the TV3 Group,

(b) An on-demand and live streaming service, 3Player, and

Discovery:

3.17 While no information is provided by the Parties, the Department is aware that Discovery operates a number of television channels in the State. Information regarding the market shares of these channels is detailed in the Market Share section of this examination.

The Target:

3.18 The Target operates a single relevant media asset, this being a pay TV

platform.14

Impact:

3.19 The information above does not give rise to concerns regarding issues of relevant media assets in the proposed transaction. The following entities

13 Liberty Global/Casey Cable, Media Merger Notification Form, pp. 15-18 14 Liberty Global/Casey Cable, Media Merger Notification Form, p. 17

Media Merger – Liberty Global; Casey Cable - 8 - relevant to this examination have or may have significant interests in media businesses that operate a number of relevant media assets:

(a) Liberty Global – The relevant media assets of the Purchaser

(b) Mr John Malone – the relevant media assets of the Purchaser and Discovery.

3.20 The ownership, of a number of the relevant media assets identified above, by the significant interest holder identified above must be assessed in terms of the market share that these relevant assets possess in their respective sectors and on a cross-sector basis.

Ownership and Control

Relevant Media Assets:

3.21 Liberty Global has holdings in the Purchaser which constitute a significant interest in the Purchaser and its relevant media assets.

3.22 Mr John Malone has holdings in Liberty Global, and Liberty Global wholly owns the Purchaser, which constitutes significant interests in both and their respective relevant media assets.

3.23 The Casey Family has holdings in the Target that constitute a significant interest in the Target and its media assets.

Regulatory Oversight:

3.24 TV3’s channels are licensed and regulated by the BAI and must comply with its various codes and rules, including the Broadcasting Codes on Election Coverage, Children's Commercial Communications Code (2013), and the Code of Programme Standards (2015).

3.25 The Television Service contract between the BAI and TV3 provides for TV3, TV3+1 and 3e’s designations as “must carry” channels on all

television platform services operating in the state.15

3.26 The BAI has powers in relation to monitoring, investigating, reporting and enforcing its compliance decisions.

15 Liberty Global/Casey Cable, Media Merger Notification Form, p. 3

Media Merger – Liberty Global; Casey Cable - 9 - Proposed Changes:

3.27 If the proposed transaction proceeds, the Casey family will resign from the Board of Casey Cablevision Limited. Tony Hanway and Ewan Dunbar will be appointed as directors the Target, and Peter McCarthy will be

appointed as company secretary by the Purchaser.16

Impact:

3.28 The information above does not in itself give rise to concerns regarding issues of ownership and control in regard to this acquisition. The ownership, of a number of the relevant media assets identified above, by the significant interest holders identified above, must be assessed in terms of the market share that these relevant assets possess in their respective sectors and across sectors.

Market Share

3.29 The above identified relevant media assets of the Purchaser are active in the Broadcasting sector in terms of the operation of a number of television channels and the operation of a pay-TV television broadcasting platform and in the Internet Media Sector through the operation of an on-demand service.

3.30 The above identified relevant media assets of the Purchaser are active in the Broadcasting sector in terms of the operation of a number of television channels.

3.31 The above identified relevant media assets of the Target are active in the Broadcasting Sector in terms of the operation of a pay-TV television broadcasting platform.

3.32 Therefore, where they are active in the same area and similar data is available for both, they are comparable with each other.

3.33 Comparison, through the use of various market share or similarly indicative data, will be used to determine whether the significant interests possessed in the Purchaser by Liberty Global and by Mr John Malone, as

16 Liberty Global/Casey Cable, Media Merger Notification Form, p. 17

Media Merger – Liberty Global; Casey Cable - 10 - measured by its relevant market shares, when taken together with the market shares of the relevant media assets of the Target, would constitute a significant interest in the Broadcasting Sector, the Internet Media Sector or across sectors such that it raises a concern. In the case of Mr John Malone, the relevant media assets of Discovery will also be considered.

3.34 Distinct data is generally available for the different media sectors and the market shares in the relevant sub-sectors therein. The relevant data is assessed by different methods and across different time periods. The sourcing of this data for this examination is outlined below:

(a) For the television channels information is available via Nielsen data, who are contracted by TAM Ireland. The data has been provided and interpreted by the Parties.

(b) For the broadcasting platforms operated by the Purchaser and the Target, the Parties have provided internal analyses of the market shares in the pay-TV broadcasting platform market and the wider broadcasting platform market.

(c) As provided for in the Competition Act, "other appropriate measures" of market share may be referenced as deemed appropriate.

3.35 There are a number of different methods of measuring market share and different time periods during which market share is measured for the purposes of media plurality examinations. The nature of a particular market share and its time period, if available, will be noted during this section.

3.36 Generally, the media sectors or sub-sectors considered for the purposes of gauging cross-sectoral market share are the print publication sector, the radio broadcasting sector, the TV broadcasting sector and the online news sector.

Tables:

Media Merger – Liberty Global; Casey Cable - 11 - Figure 1 Viewership share per 1V distributor group in II-eland, March 2018 •7

March2018 Share of viewing

Other 32.12%

' RTE 25.87%

Liberty Global 19.38%

5.68%

6.37%

Channel 4 3.88%

Viacom 2.73%

Teilifis na Gaeilge 2.13%

Discovery 0.85%

NBCUniversal 0.89%

Figtu·e 2 Viewership share per 1V distributor group in II-eland, 2017,s

2017 Share of Viewing

17 Liberty Global/ Casey Cable, Media Merger Notification Form, pp. 15-18 18 Liberty Global/ Casey Cable, Media Merger Notification Form, pp. 15-18

Media Merger - Liberty Global; Casey Cable - 12 - 26.67%

Liberty 17.36%

Viacmu 2 .18%

Discovery

NBC Universal 0.69%

5.08%

3.79%

1.97%

eir 0.12 %

Other (UK- non-opt-out)

U1VI (Northern It-eland)

Figure 3 Pay-tv subsc1ibe1· market shares, Q4 2017,9

PayTV Market Share % Actual Quantity

subscribers Q4 2017 Approx.

19 Liberty Global/ Casey Cable, Media Merger Notification Form, pp. 15-18

Media Merger - Liberty Global; Casey Cable - 13 - [60-70%]

~ :1 - Virgin Media [20-30%] L " - Eh- [0-10%] - - AerTV [0-10%] - Vodafone [0-10%] ll'eland - ,, Casey Cable [0-10%] II - Total 100%

- I [20-30%] -

Figure 4 TV subscriber (pay-tv and free-to-air) mai·ket share, Q4 2017°0

[40-50%] - I Virgin Media [1.0-20%] - Eh- [0-10%] -I

2 0 Liberty Global/ Casey Cable, Media Merger Notification Form, pp. 15-18

Media Merger - Liberty Global; Casey Cable - 14 - Saorview [20-30%] - AerTV [0-10%]

I - - Vodafone Ireland [0-10%] L - Casey Cable [0-:10%] I Total 99.9 - Parties Combined [:10-20%] - I The Purchaser:

3.37 The Purchaser's share of viewing was 19.38% in March 2018 and 17.36% on average in 2017.

3.38 In Q4 2017, the Purchaser had [10-20%] market share of TV subscriptions, including free-to-air and pay-tv, and [20-30%] of solely pay-tv subscription market share.

3.39 The Purchaser has provided market information for the 3Player for June 2018, including that the player had - unique users that month. Further information is as follows:

3Player - Catch-Up Streams

Desktop Mobile Tablet Total Displays - - - - Plays Requested - - - -

Media Merger - Liberty Global; Casey Cable - 15 - ,. Video Starts l - - I - - Average Session Time - - - -

3Plaver - Livestreams Total Streams

Total

Discovery:

3.40 Discovery's share of viewing was 0.85% in March 2018 and 1.15% on average in 2017,

The Target:

3.41 In Q4 2017, the Target's share of pay-tv subscriptions was [0-10%] and its share of pay-tv and free-to-air was, according to the Parties, negligible.

Brand & News Reach:

3.42 According to Reuters Report 2018, 27°/o of people surveyed said they used 1V3 news as a source of news (reach) while 16% said it was their main news som·ce."'

The Views of the Parties:

3.43 The views of the parties are as follows:

(a) In terms of total reach in traditional and digital services in the State, RTE has the greatest reach at 64% followed by Independent, News and Media at 44%, The Irish Times at 37% and Landmark Media vvith breakingnews.ie at 24%.

2 1 Reuters Institute: Digital News Report (Ireland) 2018, p-42

Media Merger - Liberty Global; Casey Cable - 16 - (b) For international brands, the BBC is still the most popular global news brand in the state. There are 70 newspapers circulating in the state and neither party is active in print media or radio broadcasting in the state.22

Impact:

3.44 Should the transaction proceed, Liberty Global, which has a significant interest in the Purchaser, will have significant interests in companies whose relevant media assets have the following market shares and reach:

(a) 4 television channels with the following market shares:

(i) A share of viewership of 19.38% in March 2018 and 17.36% on average in 2017, and,

(ii) A news reach of 27%, while being the main source of news for 16%.

(b) Two broadcasting platforms with a combined market share of 20-30% in the pay-TV television broadcasting platform market and 10-20% in the wider television broadcasting platform market.

(c) An online news offering ancillary to the TV3 channels, 3Player, which had unique users, play requests and livestreams in June 2018.

3.45 The above equates to the following increases in market shares, etc., in relation to the significant interests already held by Liberty Global:

(a) In relation to broadcasting platforms, a significantly >1% increase in market share.

3.46 Should the transaction proceed, Mr John Malone, who has a significant interest in the Purchaser, will have significant interests in companies whose relevant media assets have the following market shares and reach:

(a) A number of television channels with the following market shares:

22 Liberty Global/Casey Cable, Media Merger Notification Form, p. 31

Media Merger – Liberty Global; Casey Cable - 17 - (i) A share of viewership of 20.23% in March 2018 and 18.51% on average in 2017, and,

(ii) A news reach of 27%, while being the main source of news for 16%.

(b) Two broadcasting platforms with a combined market share of 20~30% in the pay-TV television broadcasting platform market and 10~20% in the wider television broadcasting platform market. (c) An online news offering ancillary to the TV3 channels, 3Player, which had- unique users,- play requests and - livestreams in June 2018.

3.47 The above equates to the followingincreases in market shares, etc., in relation to the significantinterests already held by Mr John Malone:

(a) In relation to broadcasting platforms, a significantly >1% increase in market share.

3.48 On the basis of the foregoing, both Liberty Global and Mr John Malone are considered to have a significantinterest in the Broadcasting Sector in the State.

3.49 Given the marginal increase in market shares that would be brought about by the proposed transaction it is considered unlikely that it will, in this regard, have an adverse impact on the plurality of the media in the State, either regarding diversity of ownership or diversity of content.

Governance and Editorial Management

3.50 As previously noted (par. 3-4), Mr John Malone is the chairman of Liberty Global's eleven person board of directors.

3.51 As previously noted (par. 3.8), the Casey Family has a significantinterest in the Target. Patrick Casey is the sole director on the board of the Target and will step down fromthis role should the proposed h·ansaction be put into effect.23

23 LibertyGlobal/Casey Cable, Annex 11, p. 2

Media Merger - Liberty Global; CaseyCable - 18 -

Compliance and Ethics

3.52 TV3 has a code of Ethical Business Conduct. This communicates its obligations under Irish law, sets out in detail the TV3 gifts and hospitality policy, and other ethical standards, in addition to compliance with laws. The code provides that TV3 is committed to keeping the political activities of its directors, officers, and employees separate from the company’s business, and prohibits any illegal payment to government officials or

political party representatives of any country.24

3.53 TV3 also has employee grievance procedures set out in its staff

handbook.25

Editorial Ethos

3.54 The Target has no editorial responsibility for the television channels provided over its television broadcasting platform.

3.55 Liberty Global’s editorial responsibilities in the State relate solely to the operation of the four television channels of the TV3 group.

3.56 TV3 is regulated by the BAI and subject to the terms of the BAI/ TV3 contract and the BAI’s codes and standards including the Code of Fairness, Objectivity and Impartiality in News and Current Affairs and the Broadcasting Codes on Election Coverage.

3.57 The TV3 has an Editorial Policy which sets out a number of guiding principles for the organisation in respect of news reporting. It emphasises the importance of presenting plurality of views and refraining from promoting a particular view.26

3.58 It is the view of the Parties that the TV3 editorial structure affords journalistic staff and the News Editor high levels of independence in editorial matters. It is only in the most serious of cases that the Executive Editorial Committee has a role in editorial matters.27

Impact

24 Liberty Global/Casey Cable, Media Merger Notification Form, p. 20 25 Liberty Global/Casey Cable, Media Merger Notification Form, p. 20 26 Liberty Global/Casey Cable, Media Merger Notification Form, p. 20 27 Liberty Global/Casey Cable, Media Merger Notification Form, p. 22

Media Merger – Liberty Global; Casey Cable - 19 -

3.59 The information above does not raise concerns regarding governance and editorial management in relation to the proposed acquisition, particularly in relation to the TV3 Group. Therefore, it is unlikely that the proposed acquisition will, in this regard, have an adverse impact on the plurality of the media in the State.

Content – Diversity

3.60 The Target doesn’t have editorial control over content on its pay-tv platform.

3.61 The Purchaser has provided programme schedules for the television

channels operated by the TV3 Group.28

The Purchaser

3.62 The TV3 group must comply with the BAI Code of Programme Standards. There are seven guiding principles underpinning the Code of Programme Standards and against which all complaints will be assessed. These principles are:

(a) Respect for community standards

(b) Importance of context

(d) Protection of children

(e) Respect for persons and groups in society

(f) Protection of the public interest

(g) Respect for privacy29

3.63 The TV3 Programme Policy Statement sets out TV3’s aims and ambitions for the channel overall. It states TV3’s aim to provide a wide range of programming, both Irish and foreign, that reflects Irish people’s needs and interests, its intent to provide new and innovative programming, and to be

28 Liberty Global/Casey Cable, Annex B, Programme Schedules 29 Liberty Global/Casey Cable, Annex A, BAI Code of Programme Standards

Media Merger – Liberty Global; Casey Cable - 20 -

relevant and reactive. According to the statement, news and topical daily weekday programming underpin the schedule.3°

3.64 • • • • •

3.65 • • • •

30 Liberty Global, Casey Cable, Annex 10, TV3 Programme Policy Statement 3 1 Liberty Global/ Casey Cable, Anne.'< 10, TV3 Programme Policy Statement

Media Merger - Liberty Global; Casey Cable - 21 -

The Target

3.66 The Target does not have editorial responsibility for the television channels provided over its television broadcasting platform.

Alternative Content

3.67 The Parties note that there are over 250 channels available to view in the State of which 50 carry advertising aimed at Irish consumers. These channels include RTÉ, TG4, BskyB, BBC, Channel 4, and eir Sport. In addition to television, the Parties state that Irish consumers use newspapers and radio as news sources. There are approximately 70 newspapers in circulation in the state, 34 commercial radio stations and 22 community/special interest FM services. The Parties also note that

consumers are increasingly using online news sources.33

The Views of the Parties

3.68 It is the view of the parties that the diversity of content will not be affecting by the Proposed Transaction. They submit that the only relevant media asset relevant for its content concerned in the proposed transaction is the TV3 group, which there will be no change to. There is a wide range of competition for TV3 and it will remain so if the proposed transaction goes through. TV3 is also under obligations through its contract with the BAI. Likewise, other channels established in the state are also licensed by the BAI.

Impact

3.69 The information above does not raise concerns regarding diversity of content, particularly news and current affairs, in relation to the proposed transaction. Therefore, it is unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of the media in the State.

Financial

The Purchaser:

32 Liberty Global/Casey Cable, Annex 10, 3e Programme Policy Statement 33 Liberty Global/Casey Cable, Media Merger Notification Form, pp. 31-33

Media Merger – Liberty Global; Casey Cable - 22 -

3.70 Liberty Global will acquire the Target on a debt free basis. In 2017 Liberty Global had a turnover of €13,321 million. The Purchaser, in the State, had a turnover of €416.7 million.34

3.71 The purchase price for the Target is .35

The Target:

3.72 In 2016, the Target had a turnover of and an operating profit

of .36 The Target’s creditors, falling due within one year, including bank overdrafts, bank loans, taxation and social insurance, obligations under finance lease and hire purchase contracts, and trade and other

creditors totals .37 The Target’s after tax profit, for the same year, was .38 In 2017 the Target’s turnover was .39

The Views of the Parties

3.73 The parties submit that Post-transaction the Target will become a subsidiary of a company with a very considerable balance sheet. Accordingly the Target’s financial position will be very secure following completion of the proposed transaction.40

Impact:

3.74 The information above does not raise concerns regarding finance in relation to the proposed transaction for the following reasons:

(a) The proposed transaction is on a “cash-free, debt-free” basis and, therefore, the transaction will not result in the incurring of additional debt and financing risk.

(b) Should the proposed transaction be put into effect, the Target will become a wholly owned subsidiary of the Purchaser and ultimately wholly owned by Liberty Global, which has sufficient financing to take ownership of the Target.

34 Liberty Global/Casey Cable, Media Merger Notification Form, p. 29 35 Liberty Global/Casey Cable, Annex 4, p. 12 36 Liberty Global/Casey Cable, Annex 11, Casey Cablevision unaudited Directors’ Report and Financial Statements for the year ended 31 December 2016, p. 5 37 Liberty Global/Casey Cable, Annex 11, Casey Cablevision unaudited Directors’ Report and Financial Statements for the year ended 31 December 2016, p. 5 38 Liberty Global/Casey Cable , Annex 11, Casey Cablevision unaudited Directors’ Report and Financial Statements for the year ended 31 December 2016 39 Liberty Global/Casey Cable, Media Merger Notification Form, p. 29 40 Liberty Global/Casey Cable, Media Merger Notification Form, p. 29

Media Merger – Liberty Global; Casey Cable - 23 -

Impact on the Irish Language

3.75

Impact:

3.76 The information above does not appear to raise concerns regarding the impact on the Irish language in relation to the proposed acquisition. The conditions for Irish language set out in the Programme Policy Statement will not be affected by the Proposed Transaction. Therefore, it is unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of the media in the State.

The scale and reach of RTÉ and TG4

3.77 Liberty Global’s television channels in Ireland had a combined viewership market share of 19.3% in March 2018 and 17.36% in 2017 (par. 3.37). They are in competition with RTÉ whose share was 25% in March 2018 and 26% in 2017 (Figures 1 & 2, pp. 11-13).

Impact:

3.78 The information above does not appear to raise concerns regarding any detrimental impact to the pluralistic nature of RTÉ or TG4 in relation to the proposed transaction. Therefore, it is unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of the media in the State in terms of the scale and reach of RTÉ and TG4 and therefore the adequacy of the public service broadcasters is not affected by the proposed transaction.

The Views of the CCPC

3.79 The proposed transaction was notified to the CCPC on 30 May 2018 and was cleared without conditions on 29 June 2018.

3.80 The CCPC subjected the proposed acquisition to a competitive analysis, examining its possible competitive effects. The CCPC determined that the proposed acquisition did not give rise to any horizontal or vertical competition concerns and the effect of the proposed acquisition “will not

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substantially lessen competition in any market for goods or services in the State”.41

The Views of the Undertakings Involved

3.81 The Parties state that “that the Proposed Transaction is not contrary to the public interest in protecting media plurality in the State. There is a wealth of diversity of ownership and control of content across the media industry in Ireland and this will not change as a result of the Proposed Transaction.”42

41 Determination of Merger Notification M/18/046 – Liberty Global/PBN (Casey Cable) 42 Liberty Global/Casey Cable, Media Merger Notification Form, p. 31

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4. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act

4.1 This examination, in accordance with s. 28D(2) of Part 3A of the Competition Act, was conducted with regard to the following:

(a) The “relevant criteria” as set out in s. 28A of the Competition Act.

(b) The Guidelines on Media Mergers issued in accordance with s. 28L of the Competition Act.

(d) The Views of the Competition & Consumer Protection Commission in relation to the proposed media merger.

(e) Relevant research conducted by the BAI under s. 28M of the Competition Act.

4.2 Furthermore, this examination considered the following indicators in the application of the “relevant criteria” and with regard to s. 28D(2):

(a) Significant Interest – Liberty Global and Mr John Malone are both deemed to have significant interests in the Purchaser and will gain a significant interest in the Target, through the acquisition of sole control of the Target, should the proposed transaction proceed.

Furthermore, the Casey Family is deemed to have a significant interest in the Target and that this interest will be extinguished should the proposed transaction proceed.

Whether Liberty Global or Mr John Malone gaining a significant interest in the Target is of concern, post-transaction, is assessed in

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terms of the remainder of the indicators in this examination, particularly Relevant Media Assets, Ownership and Control, Market Share, Governance and Editorial Management and the Views of the CCPC.

(b) Relevant Media Assets – The relevant media assets of the Purchaser, Liberty Global, John Malone and the Target are identified.

(c) Ownership and Control – The ownership and control arrangements of the relevant media assets identified are examined in this section, as are the regulatory regimes in place regarding the relevant media assets and any proposed changes on the part of the Purchaser to the operation of the relevant media assets of the Target post-transaction.

(d) Market Share – The market shares of the relevant media assets are analysed in terms of viewership and subscription. The aggregated market shares of those assets which would be owned by the Purchaser should the proposed transaction proceed are analysed.

The views of the Parties in relation to this section are also examined.

It is determined that:

(i) Both Liberty Global and Mr John Malone are considered to have a significant interest in the Broadcasting Sector in the State, and,

(ii) That given the marginal increase in market shares that would be brought about by the proposed transaction it is considered unlikely that it will, in this regard, have an adverse impact on the plurality of the media in the State, either regarding diversity of ownership or diversity of content.

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(e) Governance & Editorial Management – The current governance and editorial regimes of the Purchaser and the Target are analysed.

The information does not raise concerns regarding governance and editorial management in relation to the proposed transaction and it is deemed unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(f) Content – The content made available by the Purchaser and the Target and alternative content to the Purchaser’s and the Target’s relevant media assets are identified.

The information does not raise concerns regarding content management in relation to the proposed transaction and it is deemed unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(g) Financial – The Financial standings of the Parties are examined.

The views of the Parties in relation to this section are also examined.

The information does not appear to raise concerns regarding financial management in relation to the proposed transaction and it is deemed unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(h) Impact on the Irish Language – The potential impact of the proposed transaction on the provision of Irish language content is analysed.

It is noted that the conditions for Irish language set out in the programme policy statements for the TV3 Group channels will not be affected by the Proposed Transaction.

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It is deemed unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(i) The Scale and Reach of RTÉ and TG4 – The potential impact of this acquisition should it proceed on the Public Service Broadcasters, RTÉ and TG4, is analysed.

The information does not appear raise concerns regarding the impact on adequacy of the public service broadcasters in ensuring the plurality of the media in the State. Therefore, it is unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of the media in the State.

(j) Views of the CCPC – The views of the CCPC regarding the competition element of this proposed transaction are noted.

(k) Views of the Parties – The views of the Parties are noted and considered throughout this assessment, generally, and specifically in the relevant sections, and where appropriate, responses are provided.

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5. Conclusion

5.1 In light of the notification, and other materials supplied by the Parties to the proposed acquisition as considered with regard to the matters the Minister shall have regard to under s. 28D of the Competition Act, including the ‘relevant criteria’ as set out in Part 3A of the Competition Act, the Guidelines published by the Minister under s. 28L of the same Act, as considered by the Department in this assessment, it is recommended that the proposed transaction be permitted to be put into effect:

5.2 The following is the major factor informing the recommendation:

(a) Given the marginal increase in market shares that would be brought about by the proposed transaction it is considered unlikely that it will, have an adverse impact on the plurality of the media in the State, either regarding diversity of ownership or diversity of content.

(b) No other adverse impacts on plurality of the media, either regarding diversity of ownership or diversity of content, in the state are identified in this assessment.

5.3 In light of the above, it is considered that the proposed transaction is not contrary to the public interest in protecting media plurality in the State and should be permitted to be put into effect.

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