Media firms react to merger appeal defeat

Fairfax New Zealand and NZME’s failure to get a block on their merger overturned won’t be a trigger for significant cost cutting or job cuts, Fairfax NZ says.

The company’s chief executive, Sinead Boucher, also expected there would be opportunities for further partnerships between the companies outside of a merger.

Yesterday the High Court in Wellington rejected Fairfax and NZME’s appeal of the Commerce Commission’s refusal to authorise their merger, with Justice Robert Dobson accepting most of the reasoning the commission gave for its ruling in May. He ruled the watchdog was entitled to costs from the media firms.

Both companies have been cutting costs in response to the global drop in traditional advertising income, while forging partnerships in some areas.

Fairfax, NZME, MediaWorks and Television New Zealand set up a joint venture, KPEX, in 2015 to provide a ‘‘one-stop-shop’’ for people buying digital advertising in a bid to better compete with Google and Facebook.

Since 2014, Fairfax and NZME have also begun sharing some print production and distribution runs to avoid duplicating costs.

Boucher said the court ruling would not affect the way Fairfax NZ pursued its strategy ‘‘given how long it has been since we got the original decision’’.

NZME investment relations manager Paddy Walker said it would not be commenting further on the ruling until the full reasons for the decision were released.

In statement to the NZX, chief executive Michael Boggs mentioned the possibility that NZME could consider a further appeal after it had received the commission’s full decision.

Commerce Commission chairman Mark Berry welcomed the ‘‘confirmation of its jurisdiction’’, saying the merger investigation and appeal had been a significant and resource-intensive piece of work for the watchdog over the past 18 months.