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Industry bodies respond to Nine and Fairfax merger

Today it was announced two of Australia's most significant media players will become one - with Nine Entertainment intending to purchase Fairfax Media. The deal, should it proceed, would make the combined company worth around $4bn. Here, Mumbrella's Abigail Dawson looks at how the various industry bodies involved in the sector have reacted. Is it good news, or bad news for the news?

Fairfax Media could be no more, should Nine Entertainment be successful in its bid to buy the legacy media company. This morning, the two companies announced their intentions to come together, with Nine taking a 51.1% stake in the new entity. The deal would make Nine one of Australia’s largest media operators, and it would pocket around 20% of above-the-line advertising across the country, according to the Media, Entertainment and Arts Alliance (MEAA), which it says is bad for democracy, bad for diversity, bad for competition, and bad for employees.

Nine will become one of the biggest media companies in the country under the proposed transaction

The MEAA says the merging of the two businesses wouldn’t just be bad for Australian democracy but for diversity as well with the joining of businesses contributing to an already concentrated media market.

The industry union has urged Nine to uphold Fairfax’s editorial independence, should the deal go ahead, but is ultimately calling on the competition watchdog – the ACCC –  to block the merger.

Meanwhile, the MEAA is also demanding that both Nine and Fairfax protect employees’ contracts and employment conditions.

The union for Australian media workers says it will meet with all employees at Fairfax Media newsrooms to talk about the repercussions of the merger.

Not everyone sees the move as negative, however, with the Australian Association of National Advertisers (AANA), welcoming the proposed merger.

The AANA – which champions the interests of Australia’s advertisers – says the the joining of the two companies would offer advertising brands access to “quality, segmented audiences on a mass scale”.

CEO of the AANA John Broome says the two companies have “the largest digital audiences in the country”, with the deal set to give more value to advertisers.

The Nine and Fairfax merger is the first major consolidation in the media since the media reforms – which included the repeal of the two-out-of-three and 75% media ownership rules, since they were passed late last year.

The AANA predicts there will be more major moves to come.

The industry body which advocates for Australia’s publishers to promote print and digital news brands as trusted and effective advertising partners, NewsMediaWorks, says the merger will create opportunities for advertisers.

“Advertisers will be dealing with a strengthened local media business with great can-do resourcing and ideas,” CEO Peter Miller says.

The MEAA’s statement from president, Marcus Strom:

“Today’s takeover announcement is the inevitable result of Coalition’s Government’s short-sighted and ill-conceived changes to media ownership laws that were always going to result in less media diversity. With ongoing inquiries into the independence and long-term viability of quality journalism under way, the ACCC must block this takeover.

“This takeover reduces media diversity. It threatens the editorial independence of great news rooms at Nine, the Sydney Morning Herald, The Age, Canberra Times, Illawarra Mercury, Newcastle Herald, Macquarie Media and more – right around the country. It harms the ability of an independent media to scrutinise and investigate the powerful, threatens the functioning of a healthy democracy, undermines the quality journalism that our communities rely on for information.

“Nine and Fairfax must explain how they intend to defend the integrity of independent quality journalism in any combined entity.

“Any further cuts to editorial journalism at Nine and Fairfax would bite into the muscle, bone and soul of the newsroom. The proposed savings of $50m in two years should come from trimmings to bloated executive salaries and from any back-office rationalisation.”

The AANA’s statement from CEO John Broome:

“The Nine-Fairfax deal brings together two of the largest digital audiences in the country, as well as big print, streaming, free-to-air and radio audiences. Assuming the deal receives regulatory and
shareholder approval, the new company will have an opportunity to provide advertisers with access to quality, segmented audiences on a mass scale.

“It’s the first major consolidation in the media sector since the Federal government dropped its two-out-of- three rule last year and we can expect to see other major moves.

“We’re optimistic that the Nine-Fairfax merger will create more value for advertisers, but we still need to see more detail to ensure that the deal enhances, rather than diminishes, the consumer experience.”

Peter Miller, CEO at NewsMediaWorks’ statement:

“This merger will undoubtably surface potent media opportunities for advertisers both in terms of creative solutions; cross-channel potency and agreements. Advertisers will be dealing with a strengthened local media business with great can-do resourcing and ideas.”

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