Chief executive Greg Hywood: What does he mean by “the end game ” for Fairfax?
Rejection of the Fairfax-NZME merger has revived speculation about the future of Tv3. In the past, Fairfax was tipped as a possible buyer for the MediaWorks Group, including TV3 (+HR=E) and half the country’s radio stations. Eighteen months ago it made some sense. Fairfax-owns some big newspapers and the Stuff website. Mediaworks owns TV3, but the radio network is much more commercially successful. It has an under-developed digital arm. But the main plus for Fairfax would be there are none of the market dominance issues that bedeviled the NZME deal.
Media industry sources say that the media landscape has changed. Fairfax has bigger fish to fry back home. Does it want really want to hang around and buy into a difficult market in this country?
Advertising has slumped and television ad spend is particularly vulnerable. During merger hearings at the Commerce Commission, Greg Hywood said that rejection of the merger would be “the end game” for Fairfax.
Wendy Palmer resigned today as chief executive of the MediaWorks radio operation, signaling more big changes ahead for New Zealand media. Yesterday, Jeff Latch resigned as TVNZ director of content after 23 years. Both have been major players in New Zeland media. Palmer has been a leading light of MediaWorks and she has maintained market leadership against NZME radio operations.
The stability and strength in Mediaworks radio – especially in Auckland – has balanced the major problems facing TV3. Sources say that Palmer has become frustrated with the ructions during the troubled era when Mark Weldon was CEO of MediaWorks. Weldon was more interested in TV, but sources say it was a challenging time for Palmer as well. Amidst persistent rumours of potential sales for MediaWorks there have been suitors for radio alone, but few when TV is included in the sale, sources say. In August last yea, Michael Anderson took over as CEO. His profile on the MediaWorks website highlights a background radio. “Michael spent seven years as CEO of one of Australia’s largest commercial radio groups Austereo (now Southern Cross Austereo) and before that as their Group Director, Sales. “Under Michael’s leadership, Austereo’s performance in both revenue and audience grew significantly – in a time of huge change to the industry.” MediaWorks has previously rejected several requests to speak to Anderson about the strategy and future of the firm.
It’s hardly news that newspapers have been going through heavy weather. But it is clear 2017 will be make or break time for New Zealand newspapers. All over the world papers are closing and downsizing. In general, NZ papers have remained profitable, though this week Fairfax New Zealand announced a $75 million loss after writing down the value of its papers by $100 million. But there are special problems here make our journalism more vulnerable. Partly it is because we have uniquely had no specific media and as a result we have already reached the point where our media is already ruled by duopolies. The next step is monopolies and the Commerce Commission regulating competition, seems wary of taking that step.
Perhaps more than other countries New Zealand newspapers have been doing the hard work building stories from the start – the heavy lifting some call it. Establishing the detail and diversity of news for other media that follow up on them. A diminished resources for newspapers has already led to the end of the rounds system – where reporters brvsmr experts in issues or or institions, That has diminished newspaper reporter and had a downstream effect with poorer TV and radio bulletins. Further cuts are inevitable for newspapers and that will flow on to other media. The immediate future will be decided on March 15 when the Commerce Commission decides whether to change its mind and approve the merger of NZME. and Fairfax. The strong criticism in the ComCom draft report issued in November means that few expect merger approval. Commerce Commission chair Mark Berry appeared to go out of his way to discourage expectations for a turnaround, saying the influence of the combined countries as second only to Mainland China,. If it does occur there will likely be a swift change and layoffs .The two firms will stop sending two or more people to cover one news story. Some predict over 25 per cent of 3000 combined staff will go, including dozens of journalists. Even if there is no merger there will be cuts to staff longer term . Newspaper companies will have to assess how they can continue to make money in a market where their business model (they freely admit) no longer works.
I was being way overly optimistic recently when I suggested NZME and Fairfax should continue some competition in its politics, sports and investigative journalism to add a spoonful of sugar to the harsh medicine for journalism. Judging by the unvarnished concerns of the Commission issued today – comparing the print market competition to China if approval were given on the current application — it will take quite a bit more than that to make the merger go ahead. It is only the preliminary report from the Commission declining the application for a merger. The big thing to watch now is how that judgement affects the NZX share price of NZME in this country and, to a lesser extent, Fairfax in the ASX. Many of us felt that MediaWorks was fooling itself when it said that if approved, the combined media company needed to sell off one or the other of nzherald.co.nz or Stuff.co.nz to deal with new competition from Google and Facebook.
It might be overly optimistic. But I am hoping NZME and Fairfax might add a spoonful of sugar to make their merger just a tiny bit more palatable. The sweetener would be some competition to remain. Next week, the Commerce Commission is expected to announce its draft decision on the merger. For hundreds of staff the draft will be an indication about the future should two of New Zealand’s biggest media firms be united into one local company.
CAPTION. Julie Christie will continue to be the programming brains on the MediaWorks Board after McGeoch goes next month
MediaWorks has taken another step away from dysfunction of the Mark Weldon era with the departure of its chairman, Rod McGeoch. His replacement – board member Jack Matthews – will be hard-pressed to bring back the goodwill of the firm pre-receivership. But he will need to try – because the current funk puts it at a disadvantage ,to its competitors. Matthews appears to be well liked by staff and will need to try.
As tipped, MediaWorks has announced the appointment of Michael Anderson as CEO, replacing Mark Weldon. He will start on August 29 from Australia where he is currently Chairman of Oztam and oOH! Media and a non-Executive Director of Fairfax Media. Prior to his tenure on Board seven years as CEO of one of Australia’s largest commercial radio groups Austereo (now Southern Cross Austereo) and before that as their Group Director, Sales. MediaWorks statement said Under Michael’s leadership, Austereo’s performance in both revenue and audience grew significantly – in a time of huge change to the industry. Media Works said. See below – earlier stories in Zagzagger on Anderson’s likely appointment and how MediaWorks problems are in TV, not radio. Earlier this month Australian Hal Crawford started as Chief News Officer at Media Works. The appointment could not have come sooner. The media sector is facing huge upheavals in New Zealand. While acting CEO David Chalmers has kept a steady ship, the company has been left behind due to a lack of leadership to deal with the company’s strategy.
MediaWorks appointment of Michael Anderson as chief executive would still leave it short on television expertise. The Australian Financial Review has tipped Anderson’s appointment soon. Anderson is a radio man and has been chief executive of the FM radio company Austereo for eight years. He is chairman of outdoor media firm oOh! Media and a director of print and radio-focused Fairfax Media in Australia. (Though the AFR said he would likely be standing down from those board room roles). Industry people I have spoken to Anderson is well respected and liked. He is said to be inclusive – with a personal style that appears to be the polar opposite of Mark Weldon, the man he replaces. Anderson knows media well – so he is several steps ahead of where Weldon started, But he does not have a background in television.
CAPTION: Aussie media man Michael Anderson tipped to head MediaWorks.
The Australian Financial Review reports that MediaWorks has appointed a senior media executive with extensive media experience at Austereo to take over the chief executive vacancy left by Mark Weldon.
Michael Anderson is chairman of oOh! Media and the AFR tips he will be named within days to take over the company that owns TV3 and half New Zealand’s commercial radio stations. Anderson has spent 21 years at Austereo – the past eight as CEO at the Australian FM radio group, the AFR reports.
He is on the board of directors for Fairfax, which is currently merging its media interests in New Zealand with those of NZME. Weldon stepped down in April after a year of upheavals.
He left citing personal costs of the role and many talented staff left taking institutional knowledge of the company.
CAPTION: Newspapers and pay TV are in an Olympian tussle.
They claim that the agreement requires them to sign away fair dealing rights for the Games. Sky insists that is because it is offering more than fair dealings anyway. Sky also insists it is giving away more than other video rights holders and is offering to sell further rights. The terms 0f those sales are not clear. In my opinion this appears to be something of a public relations play by the newspaper companies which are taking the high ground claiming they are staying home as a matter of journalist integrity.
Sky TV spokeswoman Kirsty Way said that if media took more than their allotted free video content, Sky would seek an injunction to stop them.