Rivals warn on Nine merger
‘It will be the first time in the history of banking if those three banking organisations get together and actually say ‘out of the goodness of our heart we are going to expand the services available.’
– Seven owner KERRY STOKES
TV networks Seven and Ten have joined forces to blast any plans by rival Nine to merge with regional broadcaster Southern Cross.
Seven owner Kerry Stokes and Ten’s new boss Hamish McLennan fronted a parliamentary committee yesterday, arguing media diversity in the bush would suffer if the merger goes ahead.
The committee is examining the Government’s push to scrap the 75 per cent reach rule, which currently prevents one network from reaching more than three- quarters of the population. If it is dumped, Nine can make a $4 billion play for Southern Cross whose current deal to broadcast programs from Ten expires within months.
While Southern Cross and Nine have not confirmed they are in takeover talks, Nine boss David Gyngell told the committee that if a merger went ahead no local TV news journalists would lose their jobs.
But Mr Stokes and Mr McLennan say a Nine takeover would do noth- ing to improve media diversity in the bush and criticised the Government for trying to rush debate on the reach rule.
Mr Stokes said while Seven neither opposed nor supported the abolition of the reach rule, a Nine-Southern Cross merger would ultimately lead to cost cuts.
He noted that Nine’s main owners were two American hedge funds while Southern Cross’s major shareholder was Macquarie Bank.
‘‘ Now there may well be good reasons to merge various media groups to get more efficient, but I can promise there isn’t any way two hedge funds in New York and Macquarie Bank are going to merge things to give you more news services,’’ Mr Stokes said.
‘‘It will be the first time in the history of banking if those three banking organisations get together and actually say ‘out of the goodness of our heart we are going to expand the services available’.’’
Mr McLennan said he feared if the reach rule was abolished, a merger between Nine and Southern Cross would happen quickly.
‘‘I think what you’ll see is an automatic reduction in diversity,’’ he said. ‘‘I don‘t think we can afford to have this rushed through.’’
But Mr Gyngell said that scrapping the reach rule was critical to the future of Australia’s media and that if a merger went ahead, there would be no mass cull of regional TV news journalists’ jobs.
He said Nine had filed a draft undertaking with the Australian Communications and Media Authority committing to maintaining local news.
‘‘It’s not just about efficiencies,’’ he said. ‘‘ It’s about the people. It’s about leaving the bodies in the areas to garnish the stories that are out there.’’
Earlier, Southern Cross boss Rhys Holleran insisted the broadcaster had not yet made up its mind on a possible takeover bid from Nine.