Media firms ponder merger appeal rejection
The Government will need to look seriously at the state of the media industry after the Court of Appeal upheld a block on the merger of NZME and Stuff Ltd, Stuff chief executive Sinead Boucher says.
‘‘I think consolidation of the media is in the end going to be essential and the Government will have to look at how it could help open the door to that in the same way the Australian Government has recently done.’’
Boucher said a sustainable media industry was ‘‘essential to a sustainable democracy’’. ‘‘Challenges to the industry have been coming for many years and I feel there has been a lack of real attention and focus on the risks,’’ she said.
‘‘Now we really are seeing the really devastating effects that multinational platforms are having on the media’s ability to fund journalism.’’
It is not clear what may be next for NZME and Stuff Ltd after the Court of Appeal upheld the decision to block their merger.
Stuff Ltd publishes Stuff and print publications including the Sunday Star-Times and The Press. It also owns community website Neighbourly and internet provider Stuff Fibre. NZME media assets include commercial radio stations and the New Zealand Herald. NZME chief executive Michael Boggs said his company was disappointed as it still believed a merger was ‘‘in the best interests of both NZME’s shareholders, and the New Zealand media industry as a whole’’. NZME said in a statement that it would ‘‘take time to review the full judgment, when released, and consider its options’’.
Greg Hywood, chief executive of Stuff’s Australian parent company, Fairfax Media, said the merger would have delivered ‘‘significant synergies and sustained ‘at-scale journalism’ in New Zealand for many years’’.
‘‘We will review the court’s full judgment in detail when it is available,’’ he said.
Fairfax announced in July that it planned to merge with Australian television company Nine Entertainment Co Holdings. The companies expect that deal – which is subject to approvals from shareholders and competition regulators – will be completed near the end of this year.
Nine shareholders would own 51.1 per of the combined entity, with Fairfax shareholders owning the remaining 48.9 per cent.
Nine has yet to reveal its plans for Stuff if its own merger is confirmed.
NZME and Stuff’s market and book values have fallen as a result of the decline of traditional advertising revenues.
NZME is valued at about $127 million on the NZX.
Fairfax valued Stuff’s goodwill, licences, mastheads and trade names at A$53 million (NZ$58m) in its latest annual report, though that measure is not the same as a market value.