Media Reforms Likely To Spark Many New Company Mergers: ACCC

The recent reforms to media ownership laws are likely to result in many new merger proposals across Australian media companies, and media diversity will be a fascinating issue, ACCC chairman Rod Sims says.

Speaking at a CAMLA event in Sydney yesterday, Sims said the ACCC must assess any potential merger under the substantial lessening of competition (SLC) test, regardless of the sector.

“In the media context, the quality and range of diversity or supply of news are important factors we consider as outcomes of competitive rivalry, but they are not standalone considerations,” he said.

“The media landscape in Australia has completely and irrevocably changed since we last issued our media merger guidelines in 2006.

“We want to ensure that as an agency, the ACCC continues to keep pace with the rapidly evolving media market when considering these matters.”

Rumours have been swirling for some time around Nine and Fairfax coming a little closer together – perhaps through a merger – and the scrapping of the ‘two out of three’ rule as part of the media reforms only adds fuel to the fire.

It makes perfect sense that Nine and Fairfax would be keen for each other. One has a strong TV and digital presence, while the other has some decent print, digital and radio assets. The two companies also already have a partnership through streaming service Stan.

However, Nine CEO Hugh Marks told B&T last month that the two companies had not engaged in any talks around a potential merger deal.

As for Kerry Stokes’ beloved Seven West Media (SWM), it’s most likely acquisition target would be its affiliate regional broadcaster, Prime Media, which is part-owned by Seven Group Holdings (the biggest shareholder of SWM).

SWM confirmed in a statement in September there was “a conceptual proposal received from Prime, but that this did not result in any agreement”.

“Seven West Media has discussions with its affiliate when appropriate on various matters of common interest,” the statement said.

In anticipation of the media laws being passed, News Corp Australasia executive chairman Michael Miller said the company would “partner with anyone” during his panel appearance at the Radio Alive conference in Melbourne last month.

“I don’t think we have any preferred nation in this game in terms of broadcast,” he said.

“Looking forward, this is going to be an industry where you’re sitting next to your partners one day and sitting opposite them the next.”

The Google/Facebook conundrum

Sims also spoke of the impact that digital platforms like Google and Facebook are having in driving technological and cultural change and the companies’ impact on the market, particularly in relation to digital advertising.

“We are in a period of transformation of the media sector, and there is a growing concern that the market position of Facebook and Google is significantly affecting online advertising revenue for traditional media,” he said.

“We are aware of the concerns in the industry about the ability for traditional media to keep local newsrooms running and journalists producing new content, and to ensure we continue to have a range of diverse voices making up the Australian media landscape.

“There could well be a market failure here, and it’s something we are keen to take a look at if asked to do so.”

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ACCC Media reforms Rod Sims