Editorial: Rejection of Fairfax NZ/NZME merger makes fight for quality journalism tougher


Fairfax NZ and NZME's planned merger has been rejected.

OPINION: The Commerce Commission is naive and mistaken in its decision to reject a merger application from New Zealand's two main news organisations. It means that Fairfax New Zealand and NZME are left to fight on separately in an increasingly desperate battle to preserve all that is good about New Zealand journalism. It is going to be an increasingly hard battle to win.

Journalism is a tough business that got tougher over the last few years as the digital revolution took hold. It got so difficult that two companies which had been competitive rivals for decades decided that their best option would be to join forces. Talk of a merger would have been unthinkable just a few short years ago.

Now Fairfax (publishers of stuff and The Press among other titles) and NZME (owner of The New Zealand Herald, nzherald.co.nz and significant radio assets) have been denied the chance to join forces to confront a dynamic, unpredictable, ever-changing and frankly hostile business environment.

Commerce Commission chairman Mark Berry announces the decision to block the Fairfax and NZME media merger
Kevin Stent

Commerce Commission chairman Mark Berry announces the decision to block the Fairfax and NZME media merger

Each company will have to engineer a separate response to the multiple challenges of declining print readership and advertising revenue streams which are being vacuumed up by international conglomerates such as Google and Facebook.

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Commerce Commission sinks Fairfax/NZME merger
Why did the two publishers want to merge?

The kindest thing that can be said about the commission's decision is that it is dictated by a strict regard to legalistic principles, and looks at the problem within a narrow, five-year window. Neither of these give enough weight to confronting market realities, and the need to find a way to sustain quality New Zealand journalism well into the future.

"The applicants, like all media, are in a transition phase," the commission observes. This is an almost laughable understatement. Media companies have been continually reinventing themselves and trying to do more with less for well over a decade.

A "transition phase" implies that things will work themselves out, become gentler and more orderly. In fact, things are getting harder, to the point that, in a post-truth era when honest journalism is needed more than ever, it is now increasingly in peril.

Commission chairman Dr Mark Berry has conceded that a merged entity would extend the lifespan of some declining newspapers, and would lead to cost savings of between $40 million and $200m over the next five years.

The effect of the commission's decision is that the future of those newspapers, or perhaps the frequency of their publishing, will inevitably have to be reviewed. It is no secret that the less profitable regional newspapers which are so important to their local communities are the most vulnerable.

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The commission argues that the two companies need each other as competitive rivals to keep quality up and prices down. It also expressed concern at a "loss of plurality" – a diversity of opinion and viewpoints and their impact on public opinion and the political agenda.

This concern ignores the long and honourable tradition of New Zealand editors and journalists to always provide a fair and balanced offering of news and opinion, with or without competition.

An example can be found in the editors who published articles by their writers opposed to the merger even as they were themselves strenuously arguing for the commission to approve it.

Quality journalism is still worth fighting for, but the commission has made that fight harder.

 - Stuff


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