Media merger: Face palms and praise for Key show diversity of opinion

Opinion pieces in the New Zealand Herald have heaped praise on John Key and described his era as a "giant face palm" - and that diversity should be noted in any decision on a proposed media merger, the Commerce Commission has been told.

The Commission is holding its second day of hearings at its Wellington offices to hear submissions on the proposed merger of NZME and Fairfax NZ, which it has indicated it will block.

NZME owns major brands including the New Zealand Herald and Newstalk ZB, and Fairfax owns the Stuff website and papers the Dominion Post, the Press and a number of regional dailies.

Today's session covers how the merger could affect the range of outlets and voices in New Zealand media.

Last month the Commerce Commission issued a draft determination rejecting the proposed merger on the basis it would threaten the range of voices, opinions and issues that the news media might cover, therefore producing an outcome not in the public interest.

Today, Commission chairman Dr Mark Berry asked editors and journalists from both organisations about diversity of views within each of the organisations, as well as editorial independence.

NZME managing editor Shayne Currie said individual editors within the organisation determined what stories made it online and into print, and he did not control that.

Currie said in the past the Herald on Sunday had taken the opposite editorial view to the daily Herald on, for example, the idea of a waterfront Auckland stadium.

There was also diversity in opinion pieces, Currie said. More than 20 different pieces were online about Prime Minister John Key's resignation.

Those included one by Rachel Stewart, titled "John Key era one giant face palm", which was "completely opposed to a view that Mike Hosking has written", Currie said to laughter from the room.

Fairfax Media editor and group chief executive Greg Hywood said editorial independence "is absolutely at the core of what we do".

Hywood cited the case of billionaire and mining magnate Gina Rinehart, who became a large shareholder in the company but would not sign a charter that protected editorial independence.

She was therefore passed over for a position on the board, Hywood said. "It's something we take very seriously."

Fairfax NZ executive editor Sinead Boucher cited a recent example where she was approached by a regional editor about a very sensitive story.

Boucher said she disagreed with elements of the story, but the decision nonetheless remained with the regional editor, and the story will be published soon.

"Even I as the executive editor cannot and would not seek to suppress or control the angle or types of stories that other editors in the country seek to publish. I'm concerned about have we defamed anyone, those types of things.

"Every single day I see stories in our publications that I personally disagree with. We only monitor them for things about our standards and code of conduct and ethics."

In submissions at the end of last month, the media companies said it was not the commission's role to make decisions on "unquantifiable media plurality grounds".

NZME and Fairfax submitted that significant competition and plurality existed in news media beyond the parties in the form of other "traditional" news businesses such as TVNZ, MediaWorks, RNZ and others.

In addition, any barriers to entry and expansion have been lowered by distribution platforms such as Facebook and Google, they said.

The Commission's final decision is expected next March.

Steve McCaughan, from Star Media, who has previously worked for NZME, said it was fine to talk about diversity of views within organisations, but diversity would certainly reduce if a merger went ahead.

McCaughan said it was very hard to imagine the merged company would maintain current staffing levels in the press gallery, for example.

Academic and former Herald editor Gavin Ellis, joining by teleconference, said any merged entity needed to be held to guarantees of "autonomous internal editorial structures".

"There is a danger that structure was capable of having decisions made by fewer people, but affecting more publications."

That was a "very real" possibility down the line under a merged entity, as it looked for economies of scale.

Ellis was among a group of 11 senior journalists, including former Sunday Star Times editor Suzanne Chetwin, who submitted to the commission that an already shallow media pool must not be diminished. Their submission said New Zealand already suffered from a "dearth of serious content and analysis".

In response to Ellis, Boucher said "sustainability is the biggest protector of plurality" - and what cuts the individual companies would have to make without a merger needed to be considered.

Those cuts would be in the regions, she said, and the merger would enable current regional papers and journalism to be sustained.

Hywood said as a company with shareholders, there were no "deep pockets" to rely on, and it was crucial that the merger go ahead to "continue a runway" for the businesses to rebuild and develop new revenue streams.

"There becomes an end game in this which is really quite critical for communities."

Commissioner Berry turned his questioning to who might end up owning the merged entity.

"What is there to give comfort that at one point in time the entity could have ownership that might seek to exert influence?"

Sarah Keene, partner at Russell McVeagh and acting for Fairfax NZ, said any large buy-up of shares by an overseas company would need to go through the Overseas Investment Office (OIO) approval process.

Another possibility was using a deed poll process to make it compulsory for a merged entity to remain a member and founder of the Press Council. Members of that voluntary council sign up to charter commitments including that owners don't exert influence over editorial decisions.

Hywood, group chief executive of Fairfax Media, said a stronger entity - as would be created under the merger - would be less susceptible to takeover.