Regulation is a disincentive to invest and inhibits Fairfax Media’s ability to compete against global competitors, chief executive Greg Hywood has told a Senate hearing.
He said shareholders might push his company to invest in non-media assets as existing regulation stifled Fairfax’s ability to monetise content because of regulatory restriction of media asset ownership.
His comments were made in a Senate committee hearing into a media law reform bill that seeks to abolish the so-called two-out-of-three rule.
This rule prevents a single entity from owning a newspaper, radio station and free-to-air TV licence in the same metro market. Dropping it might prompt a string of media mergers, according to some pundits.
Mr Hywood said such a change wouldn’t necessarily result in Fairfax merging with a TV network. However, “it does provide us that option if that improves the economics of our business”.
Fairfax has majority ownership of radio network Macquarie Media.
Media reform debate continues as international search and social media giants – Google and Facebook primarily – increasingly win share of revenue from established local businesses.
Mr Hywood complained these businesses were not hindered by the restrictions placed on Fairfax, which invested in local content and journalists.
“Traditional publishers need to compete as well as they possibly can for a cut of the advertising pie, and at the moment they can’t. It’s as simple as that,” he said.
The media law reform bill also seeks to abolish the reach rule, which prevents merges between regional and metro TV networks.
Also appearing at the Environment and Communications Legislation Committee’s hearing this week were Tim Worner, CEO of Seven West Media, and the chief executives of TV networks Ten, Prime, WIN and radio network Southern Cross Austereo.
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