Fairfax Media and NZME fight merger rejection with High Court appeal

Fairfax Media and NZME Limited will file an appeal in the High Court of New Zealand in a bid to overturn the New Zealand Commerce Commission’s decision to block the merger of the two companies.

The watchdog argued Fairfax NZ and NZME would control 90% of NZ’s print media market if the merged – which could substantially lessen competition in the market – however the two media companies have hit back arguing the NZCC failed to take into account the variety of other new and traditional media platforms available to audiences, including Bauer Media (NZ), syndicated news content, bloggers, businesses, and politicians and government entities.


The assets of NZME include the New Zealand Herald, six regional daily papers, the NZME radio network and e-commerce sites GrabOne, HeraldHomes and

Fairfax New Zealand’s assets include, a share of and more than 60 metro, Sunday, regional and community newspapers.

The ASX announcement from the two companies contends: “The Appellants contend that the Determination is wrong in fact and law and was reached in breach of natural justice and procedural fairness.”

The announcement conceded the NZCC had correctly identified the struggles traditional media organisations are facing, but noted it failed to understand the realities of the new media landscape.

“The NZCC correctly found in the Determination that: In New Zealand, print newspaper readership and revenues are declining, and online advertising revenues and readership are not growing, but for print publishers online advertising revenues are not growing at a sufficient rate to replace lost revenues arising from the declines in print newspaper revenues,” the appeal notice said.

“The NZCC failed to take into account, or give sufficient weight to the number, variety and nature of: other providers of syndicated news content, including Australian Associated Press, Content Limited, and a number of local and regional newspaper providers… Bloggers, business, government entities, local and national politicians and other individuals, and other entities that also provide their own NZ news and commentary online direct to the same consumers as the NZ Appellants.”

The notice of appeal also rejected the idea the merger would lead to less competition in New Zealand’s media market.

“No substantial lessening of competition would arise as a consequence of the Transaction in any markets for: online advertising, any metropolitan daily newspapers (including The New Zealand Herald, The Dominion Post and The Press), syndication of news, national print newspaper advertising, or any community newspapers in New Zealand, other than in the ten overlap areas identified by the NZCC in the Determination.”

Fairfax Media also added the NZCC had erred in its definition of relevant markets for Sunday newspapers and community newspapers, saying it failed to take into account the nature “and degree of substitution between print and online and other advertising services”.

“The NZCC failed to take into account or failed to give sufficient weight to, the nature and degree of substitution between print and online news services which, as a matter of fact and commercial sense, limits the NZ Appellants’ ability to implement a SSNIP in the subscription or cover prices of their respective Sunday newspapers.”

Greg Hywood, CEO of Fairfax, said at the time of the merger’s rejection, it would mean deeper job cuts and argued the NZCC had failed New Zealand.

Fairfax Media CEO Greg Hywood argued that the watchdog had left the publishers struggling to face the rise of Facebook and Google. He said: “This decision does nothing to address the challenge of the global search and social giants, which produce no local journalism, employ very few New Zealanders, and pay minimal, if any local taxes.

“We believe that the NZCC has failed New Zealand in blocking two local media companies from gaining the scale and resources necessary to aggressively compete now and into the future.

“Our impression from the outset is the NZCC seemed to be fixed in its assumption that the relevant competitive marketplace was restricted to only traditional media. No amount of market data, comparable decisions or studies from similar markets overseas could move them on that. ”

The merger was rejected earlier this month with the NZCC at the time saying it was not “satisfied that the merger will not have, or would not be likely to have, the effect of substantially lessening competition in a market.”


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