Publishers reject NZ merger critics

Publishers reject NZ merger critics

A lack of submissions to the New Zealand Commerce Commission from advertisers and suppliers strengthens the case for a merger between NZME and Fairfax NZ, the two publishers have claimed.

In a statement to the commission, the publishers rejected concerns expressed in a total 50 submissions by journalists, academics and rivals regarding the potential impact on competition and independence.

They argued the feedback to the commission was very little given the profile of the proposed transaction.

“In traditional competition analysis, if competitors are opposing, it is often an indicator that the merger will be pro-competitive, as the merged entity is potentially expected to provide a better offering to customers (in this case, consumers and advertisers),” the publishers said in the submission.

The assertion the merger would create a monopoly was not supported by analysis of the number or nature of competitors.

“Many take a subjective, and arguably paternalistic (as opposed to consumer-driven) view of what is a “valuable” news / information service,” the submission said.

“The objectors complain the merged entity will produce less of what they want to see news / information services delivering. The commission, which is interested in evidence-based analysis and decision-making, should treat those views with considerable skepticism.”

There was a low barrier to entry for online and local print publishing, and news media already competed with broadcasters’ online offerings in the production of national news.

“In light of the lack of submissions by suppliers or customers – on either side of the two-sided market . . . the commission should find that a clearance is appropriate.

“There is no basis to believe a substantial lessening of competition is likely to arise in any relevant market. And even if the commission were to proceed to consider an authorisation, the benefits clearly outweigh the (limited, if any) detriments.”

The NZCC will rule on August 22.

NZME and Fairfax have previously argued their proposal would provide NZ with a strong multi-platform media company that would provide high-quality, local news, sport and entertainment, and compete against the likes of Facebook and Google.

Fairfax operates the nation’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.

For more news from NewsMediaWorks, click here.

Leave a comment