By Peter Gosnell | SYDNEY
(Reuters) -- Australia proposed scrapping media ownership restraints on Saturday which could raise huge interest among moguls looking for acquisitions, especially in its ailing, third-largest free-to-air television network, Ten Network Holdings (TEN.AX).
Federal Communications Minister Mitch Fifield told reporters that restraints on media asset ownership would go under the new proposals that have to be approved by parliament.
The decades-old 75 per cent reach rule and the two-out-of-three laws prohibiting a media proprietor from reaching more than 75 per cent of a free-to-air broadcast audience in any area or owning print, radio and free-air assets in the same city, would be scrapped.
"The idea behind the abolition of the two out of three rule is to give Australian media organizations the opportunity to configure themselves in the way that best supports their viability," Fifield said in Melbourne.
"I am agnostic when it comes to which organizations look to partner with other organizations.
"They are commercial matters for them. But what we are told, repeatedly, by Fairfax, by News Ltd, by Ten, is that the abolition of that rule will create real opportunity for media organizations to better configure themselves."
The Sydney Morning Herald said the reforms, if passed, "will open the door for a major round of mergers and acquisitions".
Rupert Murdoch last month edged a step closer to taking full control of Sky PLC in Britain after the European Commission said it had no issues with an $14.5 billion bid made by Murdoch's Twenty First Century Fox (FOXA.O).
Free TV Australia, the industry group that represents free-to-air networks, has argued that the proposed changes are necessary to enable the industry to compete against encroaching foreign tech giants including Facebook and Google.
Ten's operations are wholly reliant its key shareholders guaranteeing a $250 million credit facility due to expire in December.
Those guarantors are Australian television mogul Bruce Gordon, Crown Resorts (CWN.AX) casino magnate James Packer and Murdoch's son, Lachlan, who has a 7.7 per cent direct interest in Ten.
Further enhancing the appeal of owning a free-to-air television network is Fifield's proposal to abolish the existing television license fee structure which earns the government $130 million a year.
Fifield said this would be replaced with a more modest annual fee for the broadcast spectrum which would save free-to-air networks $414 million over five years. He said the government would make up the lost revenue through other budgetary measures.