The other companies involved in the Nine Fairfax merger
The merger of Nine Entertainment and Fairfax Media will inevitably see the coming together of Australia's biggest media brands. But the takeover doesn't just include the big names - such as The Sydney Morning Herald, The Age and the main television network, Nine. Zoe Samios explores which other media brands are involved in the deal.
This morning, Nine Entertainment and Fairfax Media announced the merging of the two businesses. Once the transaction has been finalised, the Fairfax Media brand will be absorbed into Nine.
Fairfax Media CEO Greg Hywood (L) and Nine CEO Hugh Marks (R) announced the news this morning
But it’s not just Nine and Fairfax Media’s main mastheads – The Sydney Morning Herald, The Age and The Australian Financial Review – or regional titles, involved in this. Both players have investments and joint ventures across the broader media landscape.
Nine CEO Hugh Marks Nine will put its weight behind growth assets within the new company flagging that some media brands or parts of the business may not survive.
“We’ll be focused, when operating the business going forward, on what we see is the high-growth component of what this deal provides and let’s remember that this combined business – it’s percentage of earnings from high-growth digital business will be quite significant to start with and will be growing. So strategically, we want to ensure that the management team has the ability to focus on the high-growth areas. We are quite focused and very conscious of ensuring that other businesses that may not fit that high-growth model may be better off serviced by being part of some other environment.”
But which businesses are even included in the deal?
Stuff NZ
Stuff NZ is owned by Fairfax Media. Previously named Fairfax New Zealand, Stuff NZ has been in talks with NZME over a merger of the two businesses since 2016. Under the agreement, NZME was to pay NZ$55m for a majority of Fairfax’s New Zealand assets. But the process has been lengthy, with the NZ Commerce Commission blocking the merger due to diversity of voice concerns. The two companies fought the decision in the High Court last year, but to no avail. The last update on the proposed merger was in February this year, with Fairfax Media’s StuffNZ and NZME appealing the High Court’s decision.
Currently, CEO of Nine Marks has provided no specific update on the future of this business, but Fairfax Media CEO Greg Hywood told investors today: “We’ve gone through obviously the regulatory process and into the courts on this and we’re not expecting any result on the appeal before late the end of the year.”
Hywood added the company was free to look at other consolidation opportunities in New Zealand, noting they were actively pursuing them.
Macquarie Media
Fairfax Media currently has a 54.5% shareholding in Macquarie Media, the company which owns radio stations including 2GB, 3AW and the newly launched Macquarie Sports Radio. The remaining percentage of the business is owned by John Singleton and Mark Carnegie, who last year proposed a full takeover bid. At the time, Fairfax Media denied it was seeking offers for the business.
Macquarie Media was only established in 2015, after Fairfax Media merged its talkback radio stations with Macquarie Radio Network.
Adam Lang, CEO of Macquarie Media, tells Mumbrella that should the Nine/ Fairfax scheme proceed as recommended, the major shareholder of Macquarie Media would change from Fairfax Media to Nine.
“For everyone at Macquarie Media, this means business as usual,” Lang says.
On about the future of Macquarie Media and Domain – Fairfax Media’s other entity – Marks says: “Fairfax have control of both entities. Working together to realise the upside revenue synergies rather than the cost synergies… that’s all there for the future.
“We won’t speculate with what we do with those capital structures going forward – they will stay as they are.”
Stan is owned by StreamCo, a joint venture of Nine and Fairfax
Stan
Stan is subscription video-on-demand service, jointly owned by Fairfax Media and Nine, which was announced in 2014. Under the new proposed agreement, the 50/50 venture will be wholly owned by Nine, provided the company with both a broadcasting video on demand service in 9Now, and a subscription offering in Stan.
At the time Stan was first announced, Nine’s then CEO David Gyngell described the joint venture as a “ground-breaking opportunity”.
“The combination of our two businesses will provide the joint venture with unprecedented distribution and awareness. I look forward to building one of Australia’s greatest new media businesses,” he said.
It could be argued Stan was a pre-emptive sign the two businesses – Nine and Fairfax – might eventually come together in other ways. Just one month ago, Stan announced it had reached 1m active subscribers in Australia, with CEO Mike Sneesby looking to double that number.
Stan also saw its revenue grow by 83% and a cost increase of 29% in the last half year.
Today, Marks describes Stan as one of the great examples of how the two companies can work together.
“Obviously the combined business now having 100% control of Stan means from a television perspective, our ability to work in terms of acquiring and distributing content between all of the assets of our television business. People classified Nine as a free-to-air television business. We are no longer.
“We are now a television business with interests across free to air, advertising on demand, or BVOD, and subscription on demand through Stan as well as short-form video distributed through a digital publishing platforms,” Marks says.
Domain Group
Domain, a real estate content and property listings portal is one of Fairfax Media’s most-prized jewels.
The company was funded by Fairfax Media, and established its first online presence in 1999. But just last year the company, which was a wholly owned subsidiary of Fairfax Media, was spun out as a separate entity on the ASX. Prior to the separation, it was predicted Fairfax Media’s equity value would be more than halved after the split. But the Fairfax shareholders approved the split, and Fairfax Media retained a 60% stake in the company.
When it finally launched on the ASX on November 16 2017, Domain finished trading at $3.90 a share, with the venture valued at over $2bn. Today, the company’s market capitalisation is at $1.94b. But it’s been a rocky year for the real estate business which lost its CEO Antony Catalano earlier this year, with allegations about the culture Catalano fostered later emerging in the Fairfax papers.
Domain then reported a $3.4m net loss after tax following its separation from Fairfax Media. Just three weeks ago, Domain appointed Google’s local managing director, Jason Pellegrino, to the helm.
Marks also heralds Domain as one of the major benefits of the merger.
“The other benefit obviously, Fairfax has significantly built a substantial business in Domain. When we look at this transaction going forward, the additional of Nine media and Nine assets in terms of its contribution to be able to grow and accelerate its growth of the Domain business into the mid and long term will be a significant benefit from this transaction that will greatly enhance the effectiveness and appeal of Domain,” Marks says.
Allure Media
Allure Media, owned by Netus, was acquired by Fairfax Media in 2013 and operates independently. The digital publishing company runs local versions of Business Insider, Gizmodo, Lifehacker, Kotaku, Popsugar and Who What Wear. Its founding CEO, Chris Janz, was named managing director of Fairfax Media’s metro publishing, last year. According to Fairfax Media, the group has more than 8m Australian unique browsers each month. It sits within Fairfax Media’s Digital Ventures.
Car Advice
Nine bought a majority stake in car review site, Car Advice in September of 2016, expecting to take over the business within three years. At the time, Nine’s chief digital officer, Alex Parsons, said an automotive product had been a “big gap” in its business.
Parsons said at the time: “We saw CarAdvice as a great business that was well run with a great management team. People say go build it yourself but Car Advice has been operating for many years.”
Future Women
Future Women is a Nine subsidiary founded by Helen McCabe, the company’s director of digital content. It launched in the last week and is led by editor-at-large Jamila Rivzi and editor Emily Brooks.
Unlike other women’s platforms in market, the website operates under a payment subscription model. It also has a digital magazine, an Academy and offers a number of masterclasses and events.
Pedestrian TV
In March 2015, Nine confirmed it had bought a major stake in online youth site, Pedestrian TV. It was rumoured Nine acquired a 60% stake in the business for $10m.
Five months ago Pedestrian, along with Stan, were praised for their efforts by Marks during Nine’s financial results. Digital publishing – which includes contributions from Pedestrian TV and CarAdvice, contributed $65.2m to the company, up 6% from last year’s $61.4m.
More recently, Nine acquired a full stake in the business.
Your Money: the JV between News Corp and Nine
The rebrand of Sky Business to ‘Your Money’ is a recently-announced joint venture between Nine and News Corp. It was only announced last month, but within it was the appointment of Kylie Meritt as CEO of the joint venture. It’s due to launch later this year, and will replace Nine”s free to air shopping channel 95. It will also be available on 9Now.
Today, CEO Hugh Marks says at this stage, there are no changes to those plans.
You’ve got the (L) & (R) under Greg and Hugh’s photo, around the wrong way
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Hi Names,
You are most correct. Thank you for flagging. We have amended.
Apologies to both Greg and Hugh for the error (although I suspect/hope they were too pre-occupied yesterday to notice!)
Thanks,
Vivienne – Mumbrella
Are there a few more? I may be a bit out of touch, I think they may also have stakes / ownership of: Oneflare, Alluremedia (Lifehacker, Gizmodo and Kotaku), RSVP, Oasis and Weatherzone.
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Good spot that one Solely!
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