Publishers continue fight for NZ merger

Publishers have maintained the pressure on the NZ Commerce Commission in a bid to save a proposed merger of NZME and Fairfax NZ.

A 10-page document features 55 clauses in which the two companies state jointly that the commission does not understand how journalism works and that both independent newspaper proprietors and the local advertising body dismiss competition and pricing concerns.

It claims that public objection has been based on “nostalgic and ideological grounds” and “not a single one has raised a credible solution to replace the funding model that currently supports journalism, or any alternative to the merger to preserve print publications”.

The industry faced an “end-game” if the commission rejected the merger, Fairfax CEO Greg Hywood said at the public hearing last week.

Respected independent publisher Michael Muir, owner of the Gisborne Herald, rejected the threat to plurality of voice, if the merger went ahead.

Rejection, he said, would create a greater danger for New Zealand public life. It would “entrench yesterday’s business model, so there is no longer a sustainable business model for those journalists to have jobs”.

A merged entity would be “good for independent publishers by sustaining investment in the print sector”.

The commission is also resisting approval, claiming that a combined company would ramp up ad rates, thus abusing its market position.

Ad industry body, The Communication Agencies’ Association of New Zealand, not only dismissed this notion but further criticised the commission, saying it held “very real fear” that the draft determination rejecting the merger would undermine “the medium-term sustainability of a large part of the local industry”.

It claimed this would expose New Zealand to “further domination by offshore-based entities and reduce choice for advertisers, agencies and consumers”.

The sentiment was echoed in other forums. Media analyst Bill Ralston wrote in The Listener that “diminishing of competition because eventually either NZME or Fairfax will simply collapse under market pressure”.

The commission will make its decision on or before March 15.

Fairfax is New Zealand’s largest print media network, featuring nine daily and three weekly newspapers, 61 community publications, 10 magazine titles and six websites, including stuff.co.nz. It also has a minority shareholding in social media site Neighbourly.

NZME owns eight daily and two weekly newspapers, 24 community publications, six magazine titles, 10 radio stations and 38 websites, including nzherald.co.nz. As well as websites related to its print and radio offerings, NZME owns a number of individual websites such as Grabone, Shop Green and Adhub.

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