Wellington’s Dominion Post and parent company Stuff face an uncertain future as Australian media is bushwhacked by a surprise takeover.
By Mark Cubey
In the biggest change to Australasian media ownership in decades, the giant free-to-air television, digital publishing, video-on-demand and content production organisation Nine Entertainment has announced a surprise takeover of rival Fairfax Media.
The takeover, which will create Australia’s largest integrated media player, was enabled by changes made last year to the country’s 30-year-old cross-media legislation by the Liberal-National coalition government.
It requires approval from the Australian Competition and Consumer Commission but Prime Minister Malcolm Turnbull expects it to be approved,
The Nine/Fairfax deal takes place in a market that is already one of the most concentrated in the world. Worth an estimated $AU4 billion, it will see Nine take a controlling 51.1% share in the new business, to be called NEC (the name of Nine’s parent company, Nine Entertainment Co).
Fairfax with the remaining 49.9% share, will have little control of the future of the combined media group.
The takeover was slammed by former Australian prime minister Paul Keating who said that with Channel Nine’s majority stake in the company, it will run the editorial policy.
“The problem with this is that in terms of news management, Channel Nine, for over half a century, has never other than displayed the opportunism and ethics of an alley cat.
“There has been no commanding ethical or moral basis for the conduct of its news and information policy.”
The takeover will have an impact in New Zealand, where Fairfax Media owns multi-media provider Stuff Limited. That company’s assets include New Zealand’s top website stuff.co.nz, hyper-local social network neighbourly.co.nz, and publications including Wellington newspaper The Dominion Post, The Press in Christchurch and The Sunday Star-Times, as part of a portfolio of regional and community newspapers, magazines and agricultural publications.
Stuff also holds a 51% shareholding in NZ Fibre Communications Limited, which operates the internet service provider stuff-fibre.co.nz.
In Australia, Fairfax’s print titles include metro newspapers The Sydney Morning Herald, The Age, The Australian Financial Review, BrisbaneTimes.com.au and WAToday.com.au, as well as a number of suburban and provincial titles across the country and a controlling stake in the Macqurie Radio Network.
Fairfax’s combined Australian publishing platform has a national audience of over six million people.
The board of NEC will be chaired by Nine’s non-executive chair and former Liberal Party leader Peter Costello.
Hugh Marks of Nine will be the new chief executive, and was quoted as saying the main motivation for the takeover of Fairfax was to acquire its 60% stake in property business Domain, and take total ownership of the companies’ joint venture TV streaming service Stan. He said there were no plans to close any newspapers.
However, in a joint statement to the Australian stock market, Nine and Fairfax said that once the merger was complete there would be a review of “the scope and breadth of the combined business, to align with its strategic objectives and its digital future”, and that it would generate annual cost savings of at least A$50m within two years.
In New Zealand, Fairfax is waiting on the Court of Appeal for a ruling on whether it should be allowed to merge Stuff Ltd with rival media company NZME. Both organisations have argued that a merger would reduce costs and support journalism.
Speculation is now swirling that NEC could now acquire MediaWorks, the New Zealand owners of the television channel Three. MediaWorks warned this week that it may have to pull out of television broadcasting, citing a “genuine risk that the Government, through its owned media channels, may become the only broadcaster in New Zealand”.