A Spoonful of Sugar Needed For The Fax-ME Merger

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.

Approval would set the scene for large-scale redundancies and reduce the number of independent and unique voices in the media. This is big bananas and it is  make or break time for New Zealand news media. Realistically, ComCom is unlikely to say No.Unknown-33 Approval may not be assured as was originally claimed by some.

But the Commission is bound to look at the counterfactual argument: What would happen if it stopped the merger going ahead. The companies would have a tough time surviving on their own if the merger was halted.

One of the failings of the Commerce Act is that the competition watchdog cannot set any conditions for clearance. I’m hoping the two companies can volunteer to retain competing coverage in politics, sports and investigative journalism.Unknown-32

Competition is important in journalism, just as it is in other businesses. There is no guarantee of such an offer with Fairfax or NZME. They cannot be required to maintain separate news teams to ensure they get the go-ahead. But the two companies should beware the opportunity to diminish their offering to the bare minimum.In my opinion, that would hasten the lost faith in news.

Business Desk reported on October 7:

On October 7 MediaWorks says a merged Fairfax/NZME news operation should have to sell one or other of the New Zealand Herald or Stuff websites to get regulatory approva. MerdiaWorks said s would combine NZME’s flagship New Zealand Herald newspaper and nzherald.co.nz website, a portfolio of radio stations including Newstalk ZB, and the GrabOne daily deals site with Fairfax’s suite of newspapers including the Sunday Star-Times, Dominion Post, The Press, the stuff.co.nz website and various magazines, including New Zealand House & Garden.. MediaWorks,“The Commerce Commission should also consider potential public detriment as a result of the proposed merger, due to the fact the merger will significantly reduce media plurality in New Zealand and reduce the number of viewpoints that are available to the audience,” MediaWorks said, adding that if a merger goes ahead, the entity should be required to divest either nzherald.co.nz or stuff.co.nz.

That seems highly unlikely since that level of market dominance is exactly what makes the combined operation commercially viable.



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