The Australian Competition and Consumer Commission has waved through the proposed merger between Nine Entertainment and Fairfax Media, with the deed expected to be done next month.
The ACCC said in a statement on Thursday the key issue it considered was Australian news, including online news, current affairs reporting and investigative journalism.
It said an extensive investigation heard 1000 submissions and received detailed documentation from Nine and Fairfax.
Fairfax head Greg Hywood told his staff in a letter on Thursday he expected the merger to go ahead by December 10.
“The planning and preparation to bring Fairfax and Nine together as one great media company is well under way,” Mr Hywood wrote.
Nine’s chief executive Hugh Marks welcomed the regulator’s decision.
“It is a clear acknowledgement of the changing competitive landscape in our industry, where the ability to compete across a variety of platforms and to engage different audiences is key,” he told the ABC.
The next challenge for the merger will be shareholder approval, with Fairfax investors voting on November 19. Following court approval, the merger is scheduled to be completed on December 7, with the combined group beginning business on December 10.
Under the proposal, Nine Entertainment will hold 51.1 per cent of the company with Fairfax investors holding 48.9 per cent.
Assuming it all goes to plan, the combined entity will simply be called “Nine” from December 10, and the Fairfax brand will cease to exist.
The ACCC said its investigation had canvassed a range of issues.
“While the merger between these two big name media players raised a number of extremely complex issues, and will likely reduce competition, we concluded that the proposed merger was not likely to substantially lessen competition in any market in breach of the Competition and Consumer Act,” ACCC chair Rod Sims said.
“This merger can be seen to reduce the number of companies intensely focusing on Australian news from five to four.
“Post the merger, only Nine-Fairfax, News/Sky, Seven West Media and the ABC/SBS will employ a large number of journalists focused on news creation and dissemination.
With the growth in online news, however, many other players, albeit smaller, now provide some degree of competitive constraint.
“These include, for example, The Guardian, The New Daily, Buzzfeed, Crikey and The Daily Mail.
“While there are important barriers to building trust and scale, significant new entry into the Australian online news market has already occurred and made a noticeable difference. Due to the difficulties in monetising journalism online, however, it is hard to predict the future landscape with any certainty.”
The ACCC said Nine’s television operations and Fairfax’s main media assets generally do not compete closely with each other.
“By most measures, a combined Nine-Fairfax will likely become one of the largest online providers of Australian news, alongside News Corp Australia and ahead of the ABC, so this was another area of great focus,” Mr Sims said.
“We found that while Nine and Fairfax online sites currently did not constrain each other much, other news websites would likely competitively constrain the combined Nine-Fairfax.”
The ACCC also rejected suggestions that regional news coverage would be disrupted.
“Media markets are highly dynamic. The shift to online and the huge reduction in hard-copy classified advertising revenue have changed the media landscape irrevocably,” Mr Sims said.
“The impact of some of these changes is demonstrated in the approximate halving of advertising revenue from Fairfax’s digital and print mastheads in the last five years.
“The ACCC recognises there will likely be changes to the way Fairfax and Nine operate in future, either due to the changing media landscape more generally or due to the merger itself.
“However, we reached the conclusion that if such changes do occur, they would not be, to a significant extent, caused by the merger lowering the level of competition.”
-With AAP, ABC