FEARS FOR FAIR­FAX

Keat­ing warns Her­ald & Age con­signed to ‘eth­i­cal dust­bin'

The Australian - - FRONT PAGE - TROY BRAMSTON SE­NIOR WRITER

‘A low-rent news or­gan­i­sa­tion, Nine will have ed­i­to­rial com­mand of ma­jor print mast­heads in the coun­try’ PAUL KEAT­ING FOR­MER PM

Paul Keat­ing has sounded the death knell for Fair­fax’s news­pa­pers, say­ing the merger with the Nine Net­work will see its jour­nal­ism poi­soned by the “low-rent” tele­vi­sion com­pany and con­sign them to the “eth­i­cal dust­bin”.

The for­mer prime min­is­ter blasted the de­ci­sion by the Aust- ralian Com­pe­ti­tion and Con­sumer Com­mis­sion to ap­prove the $4.2 bil­lion merger of Nine with Fair­fax yes­ter­day, char­ac­ter­is­ing it as a “truly ap­palling de­ci­sion”.

“The ACCC has to­day dis­played its in­tel­lec­tual and pol­icy weak­ness by con­sign­ing The Syd­ney Morn­ing Her­ald, The Age and The Aus­tralian Fi­nan­cial Re­view to the eth­i­cal dust­bin of Chan­nel Nine,” he said in a state­ment pro­vided to The Aus­tralian.

“The ACCC’s naive waf­fle in its me­dia state­ment to­day that ‘Nine’s tele­vi­sion oper­a­tions and Fair­fax’s main me­dia as­sets do not com­pete closely with each other’ shows a com­plete mis­un­der­stand­ing of the role of cap­i­tal-city print jour­nal­ism in shap­ing the me­dia de­bate in tele­vi­sion and print on a daily ba­sis.

“The no­tion that, as the ACCC says, The Guardian, The New Daily, Buz­zfeed, Crikey and The Daily Mail can be seen as ad­juncts to print mast­heads of trust and scale is sim­plis­tic non­sense un­be­com­ing of an eco­nomic body, as the ACCC should be.”

He lashed Nine for a lack of jour­nal­is­tic ethics that he said would in­fect Fair­fax print prod- ucts. “A low-rent news or­gan­i­sa­tion, Nine will have ed­i­to­rial com­mand of ma­jor print mast­heads in the coun­try,” he said. “This will poi­son qual­ity jour­nal­ism (and) more than that, re­move chunks of lo­cal spe­cific po­lit­i­cal is­sues nor­mally cov­ered by news­pa­pers from the po­lit­i­cal de­bate.”

As trea­surer from 1983-91, Mr Keat­ing led the cre­ation of the cross-me­dia laws which re­quired news­pa­per busi­nesses, such as News Corp and Fair­fax, to di­vest them­selves of TV as­sets. Me­dia com­pa­nies, he said at the time, “could be a queen of the screen or a prince of print, but not both”.

He said the de­ci­sion by the ACCC not to chal­lenge the NineFair­fax merger skew­ers me­dia di­ver­sity in Aus­tralia. “The cross­me­dia rules, which the Hawke govern­ment in­tro­duced, pro­tected cap­i­tal-city print jour­nal­ism from dom­i­na­tion by tele­vi­sion com­pa­nies for 32 years,” he said.

“The de­feat of the cross-me­dia laws by Mal­colm Turn­bull and his govern­ment left the for­mer legis- la­tive pro­tec­tion of print to the ACCC.

“Claims by the ACCC that what it may de­cide may not travel well in the courts only points up the ACCC’s gut­less­ness.”

“Like a bunny caught in the head­lights, hav­ing a go in the courts is too much for it to con­tem­plate. This is the prob­lem of hav­ing bu­reau­crats de­cide ma­jor po­lit­i­cal and plu­ral­ity is­sues.

“They are sim­ply not up to it.”

Fair­fax Me­dia’s fate now lies in a share­holder vote this month af­ter Aus­tralia’s com­pe­ti­tion watch­dog waved through the $4 bil­lion merger of the 177-year-old pub­lisher with Nine En­ter­tain­ment.

In giv­ing a green light to the deal, which will see the Chan­nel 9 broad­caster take con­trol of news­pa­per mast­heads in­clud­ing The Age, The Syd­ney Morn­ing Her­ald and The Aus­tralian Fi­nan­cial Re­view, the Aus­tralian Com­pe­ti­tion & Con­sumer Com­mis­sion chair­man Rod Sims high­lighted ris­ing com­pe­ti­tion from dig­i­tal ri­vals on es­tab­lished me­dia play­ers.

“Me­dia mar­kets are highly dy­namic. The shift to on­line and the huge re­duc­tion in hard-copy clas­si­fied ad­ver­tis­ing rev­enue have changed the me­dia land­scape ir­re­vo­ca­bly,” he said yes­ter­day.

“The im­pact of some of these changes is demon­strated in the ap­prox­i­mate halv­ing of ad­ver­tis­ing rev­enue from Fair­fax’s dig­i­tal and print mast­heads in the last five years,” Mr Sims said.

“The ACCC recog­nises there will likely be changes to the way Fair­fax and Nine op­er­ate in fu­ture, ei­ther due to the chang­ing me­dia land­scape more gen­er­ally or due to the merger it­self. How­ever, we reached the con­clu­sion that if such changes do oc­cur, they would not be, to a sig­nif­i­cant ex­tent, caused by the merger low­er­ing the level of com­pe­ti­tion.”

Mr Sims noted that post the merger, only Nine/Fair­fax, News Corp and Sky News, Seven West Me­dia and the ABC and SBS will re­main as the big­gest em­ploy­ers of jour­nal­ists. News Corp is the owner of The Aus­tralian.

But the growth in on­line news providers is likely to en­sure fierce com­pe­ti­tion, he said. “Many other play­ers, al­beit smaller, now pro­vide some de­gree of com­pet­i­tive con­straint,” he Ms Sims said.

The ACCC de­ci­sion was wel­comed by Nine chief ex­ec­u­tive Hugh Marks, who will lead the en­larged group if the deal is ap­proved. Nine chair­man Peter Costello will re­main in the his role.

“It is clear to us the ACCC were thor­ough in their con­sid­er­a­tions of the many sub­mis­sions they re­ceived and we wel­come this rig­or­ous process, as this is first merger to take ad­van­tage of the govern­ment’s me­dia law re­forms,” Mr Marks said. “It is a clear ac­knowl­edg­ment of the chang­ing com­pet­i­tive land­scape in our in­dus­try, where the abil­ity to com­pete across a va­ri­ety of plat­forms and to en­gage dif­fer­ent au­di­ences is key.”

Nine will own 51.1 per cent of the en­larged com­pany, with Fair­fax share­hold­ers hav­ing the re­main­ing 48.9 per cent.

Fair­fax chief ex­ec­u­tive Greg Hy­wood, who is ex­pected to leave once the deal is done, told staff in a note that Nine’s takeover would im­pact a large num­ber of staff but they should re­main fo­cused on au­di­ences and ad­ver­tis­ers.

The merger is fore­cast to de­liver an­nual cost sav­ings of at least $50 mil­lion.

Morn­ingstar an­a­lyst Brian Han said the Fair­fax share­holder vote on Novem­ber 19 was the “more crit­i­cal hur­dle” to the deal.

“The al­ter­na­tive be­ing, can Fair­fax re­ally sur­vive as a stand­alone com­pany in this chang­ing me­dia land­scape, and the an­swer would be no,” Mr Han said.

Un­der the merger, Fair­fax share­hold­ers will get a mix of cash and scrip, in­clud­ing 0.3627 Nine shares and 2.5c for each Fair­fax share held. This im­plied a 22 per cent pre­mium to Fair­fax’s share price of 77c the day be­fore the deal was an­nounced.

Fair­fax and Nine shares lost early morn­ing gains to fin­ish flat at 62.5c and $1.68, re­spec­tively, on the ASX yes­ter­day.

AAP

‘Ap­palling de­ci­sion’: Keat­ing

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