Aussie quakes, NZ aftershocks

Fairfax moves will affect this country too

The future of Fairfax New Zealand’s assets is uncertain as its Australian parent pushes back against an offer from private equity company TPG.

At print time, the Murdoch newspaper The Australian had reported that TPG and the Ontario Teachers’ Pension Plan had threatened to walk away from their A$2.2 billion offer for selected assets, if Fairfax’s board insisted on a wider deal including Australian community papers and NZ assets such as Stuff and the Sunday Star-Times.

It is easy to see why Fairfax investors are reticent about the proposed asset split. If TPG cherrypicked Fairfax’s property arm, Domain, and its three main newspaper mastheads, that would leave Fairfax with an arguably incoherent bunch of papers, radio and digital operations on both sides of the Tasman.

No matter what happens across the Tasman, the New Zealand media landscape is vulnerable to ownership quakes.

Transtasman printing firm Horton Media and the Otago Daily Times might buy some Fairfax community and provincial titles. But Fairfax’s big asset is the Stuff website, and that relies on content from its newspaper chain.

What of the other global player, Oaktree Capital, the owner of MediaWorks, with its radio operation and TV3?

TPG is a former equity investor in MediaWorks and still holds its debt.

Both Oaktree and Fairfax will need to counter the cross-media holdings of NZME, publisher of the Herald.

Beyond plans for a 41 per cent stake in the proposed merger with NZME — now blocked by the Commerce Commission — Fairfax has shown little enthusiasm for New Zealand.

As for Oaktree, its success with MediaWorks radio has compensated for challenges facing TV3, and free to air TV in general.

Last month, Oaktree made a $12.5 million top-up to TV3, in part to pay for the costs of setting up The Project and The AM Show.

However, it is unclear whether Oaktree wants to expand its comparatively tiny New Zealand holdings.

Fan fallout

Sky TV has acknowledged that discontinuing its daily and weekly Fan Pass offers has hit uptake for its main programming offer.

“I’m not [saying] it did not take customers away from us but the numbers were low,” said chief executive John Fellet.

The discarded daily and weekly passes went for $15 and $20 respectively. From May 24, the minimum monthly subscription for Fan Pass has been hiked from $60 to $100.

Fellet said the short term deals had not been profitable and were subsidised by longer term Fan Pass offers. “We were experimenting,” he said, “trying to get more return out of the money tied up in sports rights. But other pay companies have not made such offers.”

The upshot is that consumers have lost an option for online sports, a genre that is dominated by Sky.

Fellet said Sky had considered adopting a more “dynamic” pricing option where daily packages differed, depending on what sports events were on offer. However, that had drawn a negative response in surveys of users.