Matthew Theunissen is a reporter for the Herald on Sunday.

New submissions in NZME-Fairfax merger

NZME mastheads. The New Zealand Herald, Weekend Herald and Herald on Sunday. Photo / File
NZME mastheads. The New Zealand Herald, Weekend Herald and Herald on Sunday. Photo / File

The Commerce Commission has received a raft of new submissions on its preliminary decision to reject the merger of New Zealand's two largest print media companies.

The commission's draft determination, released on November 8, proposed to decline the merger between NZME and Fairfax, forming the view that it would likely substantially lessen competition in a number of markets.

The commission today published 26 submissions it received in relation to the draft determination.

A group of 11 former Fairfax and NZME editors submitted that the proposed merger would "substantially weaken regional and community competition throughout the country".

"New Zealand already suffers from a dearth of serious content and analysis," the group said.

The country's newspapers had been subject to a wave of redundancies that had seen experienced staff culled. They were also seeing a "severe loss of institutional knowledge and a pandering to the lowest common denominator; that is click bait stories that draw the widest audience".

"At the same time television has all but abandoned current affairs and our public discourse is increasingly glib," the group said.

The merger would see one organisation control 90 per cent of the country's print media market and associated websites - the greatest level of concentration in the OECD.

"That cannot be healthy, particularly in a society like New Zealand's that has so few checks and balances in its constitutional arrangements."

Advertising industry group Communication Agencies Association of New Zealand (CAANZ) said it did not have concerns about the merger increasing print advertising prices.

"To the contrary, CAANZ sees the proposed merger as a benefit to advertisers as the enhanced ability of the merged entity to manage its legacy print media may mean that the channel is retained for advertisers as an alternative option for a longer period than it might otherwise be."

In relation to digital advertising, it said large multinationals like Facebook and Google owned and controlled the technology behind it, with New Zealand-owned media making up a fraction of the overall digital advertising pool. A New Zealand media company that priced its digital advertising at uncompetitive levels would see advertising agencies spend their money elsewhere, it said.

"Thinking in terms of control of 'front cover of the newspaper advertising' in the digital world is outdated, and does not reflect the experience of advertising in the marketplace of 2016 or how consumers use and consume media."

It added that CAANZ's "very real fear" was that the commission's draft determination "undermines the medium term sustainability of a large part of the local industry, opening the New Zealand industry up to further domination by offshore entities and reducing choice for advertisers, agencies and consumers".

"In a media environment that is increasingly global, where consumers can access media platforms from around the world, it is important that New Zealand maintains strong, viable media organizations that have the scale to survive in the face of threats from off-shore organizations."

The Coalition for Better Broadcasting (CBB), which opposed the merger, cited 39 NZME and Fairfax articles about the merger, of which it said a larger number were pro-merger.

"If there are concerns about how the applicants' own media outlets have represented their prospective merger thus far, then there must be even greater concerns about the potential for any merged entity to skew the overall pattern of news coverage on future issues of public concern where vested commercial interests might outweigh the editorial commitment to the public interest," it said.

Bay of Plenty media company Sun Media welcomed the commission's draft decision, saying the merger would be detrimental to the organisation and to small publishers throughout the country.

"[T]he reduction in competition and increased power of the merged companies would result in even more price fixing than is attempted now.

"This would be an assault on the many private New Zealand owned operations, purely for the benefit of two Australian-owned giants."

- NZ Herald

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