FEARS FOR FAIRFAX
Keating warns Herald & Age consigned to ‘ethical dustbin'
‘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.
‘Appalling decision’: Keating