News firms press merger benefits
Lawyers representing Fairfax New Zealand and NZME have told the High Court in Wellington that blocking their merger would mean throwing away up to $200 million of economic benefits to the country to avoid a ‘‘slight risk’’ of a small reduction in media diversity.
Fairfax NZ and NZME have been appealing a High Court ruling by the Commerce Commission in May not to grant authorisation for their merger.
David Goddard, QC, said in his closing argument for the media companies that there was a real prospect of ‘‘far-reaching cuts’’ to the businesses if they were not allowed to merge.
It was not the commission’s role to say ‘‘let’s spend $100m to $200m of New Zealand’s scarce resources on pursuing plurality by refusing this merger’’, he said.
‘‘New Zealand could buy a lot of publically funded plurality for $100m to $200m.
‘‘That’s an awful lot of extra journalists for Radio NZ – hundreds. That’s an awful lot of investment in the provision of publicinterest commentary through other channels through a beefedup NZ On Air.’’
The Commerce Commission, which gave evidence earlier this week, expressed particular concern about the loss in media diversity that might result from merging the Stuff and NZ Herald websites, emphasising the volume of material they published.
But Goddard argued it was wrong to put Fairfax and NZME’s reporting on a pedestal.
The Law Commission concluded in 2013 that people were no longer reliant on the mainstream media as their only source of reliable news and information, as they had access to a ‘‘plethora of news sources ranging from global media brands through to new media providers’’.
The Law Commission’s ‘‘crystal ball’’ had provided a better picture of the media industry than the Commerce Commission’s ‘‘rearview mirror’’, he said.
Leaving aside social media, television was still ‘‘dominant’’ when it came to reach, he said.
Goddard said there was no prospect of Fairfax and NZME introducing a paywall for general news on their websites with or without the merger, while they might introduce one for certain types of content, such as business news, in either scenario.
The Commerce Commission had ‘‘almost inevitably’’ miscalculated the risk of a drop in quality in the companies’ news reporting after the merger, he said.
This was because it had treated advertisers and readers as ‘‘separate markets’’ and not taken into account the effect any drop in quality would have on advertising revenues.
There was no shortage of trusted media brands such as Television New Zealand, RNZ and The Guardian, and readers could vote with their thumbs, he said.
Goddard acknowledged there would be an ‘‘immediate’’ reduction in journalist numbers if the merger went ahead. But he said there was no reason to think that would be materially different if the merger did not proceed.
Any fear the merger would stifle public debate on important topics was fanciful, he suggested.
‘‘There is no New Zealand track record of [media owners] influencing editorial stances and no real prospect of this changing as a result of the merger.’’
Fairfax NZ’s publications include Stuff, The Sunday StarTimes, The Dominion Post and The Press. NZME is listed on the NZX and owns the New Zealand Herald as well as many radio stations.
Justice Robert Dobson said he would reserve the court’s decision and could not advise when it would hand down its judgment.