The planned merger of TV and print media businesses Nine Entertainment and Fairfax Media has the backing of the Australian Competition and Consumer Commission (ACCC).
Chair Rod Sims said the merger raised numerous “extremely complex issues, and will likely reduce competition” but in the end his organisation concluded that it wasn’t substantial enough to breach the Competition and Consumer Act.
Nine’s television operations and Fairfax’s main media assets generally do not compete closely with each other, the ACCC said, with Nine’s news and current affairs programs targeting “a mass market audience” while Fairfax’s “more in-depth coverage” was focused on a subscription audience. The competition watchdog says it looked at more than 1,000 submissions, as well as company documents to reach its conclusions.
Sims said that while the merger will reduce the number of companies focussed on Australian news from five to four, the growth in online competitors will “provide some degree of competitive constraint”, but a key issue is the rapidly changing media landscape.
“By most measures, a combined Nine-Fairfax will likely become one of the largest online providers of Australian news, alongside News Corp Australia and ahead of the ABC, so this was another area of great focus,” he said.
“We found that while Nine and Fairfax online sites currently did not constrain each other much, other news websites would likely competitively constrain the combined Nine-Fairfax.”
The ACCC also considered the impact on competition in advertising markets, content acquisition and non-news content, with Sims pointing to a halving in Fairfax’s advertising revenue in the last five years.
“Media markets are highly dynamic. The shift to online and the huge reduction in hard-copy classified advertising revenue have changed the media landscape irrevocably,” he said.
In response to today’s announcement, Fairfax Media CEO Greg Hywood wrote to staff saying he expected the merger to kick off on December 10, assuming shareholders approve the deal when they vote on it on November 19.
“We are very focused on making it a successful transition,” he told staff.
“From the outset we believed this merger was right for our future because it builds a stronger multi-platform media organisation, allows continuing investment in our independent journalism, and gives us more diverse independent brands operating in complementary channels, working alongside each other.”
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