The country's media landscape is headed for momentous change with a planned merger of the extensive New Zealand assets of Fairfax Media and APN News & Media, both of which are Australian-owned.
The proposal has immediately raised fears about the future diversity of news content, monopoly operations and loss of media jobs.
There would immediately be a duplication of hundreds of jobs in local news, sport and business divisions to be addressed and combining the digital platforms raises the likelihood of paywalls, but the merger could also signal divestment of smaller media holdings and opportunities.
Numerous newspapers, including The New Zealand Herald, The Dominion Post and The Press, more than 100 radio stations and several digital platforms are affected, employing between them more than 3000 staff.
The planned "demerger'', or listing, of APN's NZME. group of media assets on the stock exchange could be followed by a separate merger with Fairfax's New Zealand assets. Fairfax would then be likely to take a stake in the newly listed NZME.
APN also said yesterday it was looking to raise about $180million to pay off debt.
A sticking point will be whether countrywide competition would be stymied by the asset merger, given it encompasses such a large number of the country's media outlets. Approvals will required from the Commerce Commission and Overseas Investments Office. Applications are to be lodged with the former by next month.
An APN board statement yesterday said if plans to demerge and list did not go ahead, "APN intends to continue discussions'' to merge its assets with Fairfax''.
"APN and Fairfax have entered into exclusive discussions regarding the potential merger of their respective New Zealand media businesses. If completed, the combined company will be a leading New Zealand media business, offering depth of news, sport and entertainment coverage across a mix of channel including print, digital and radio,'' APN said.
However, the journalists' union, E tu, said the proposal meant there were "serious implications'' for journalists' jobs and the quality of local journalism.
E tu national media organiser Paul Tolich said the proposal meant content of diverse major news publications "will be pared back to just one key generator of comment''.
"This would seriously affect the future of news gathering by journalists because these assets are key sources of hard news,'' he said yesterday.
Mr Tolich said the proposed merger was predicated on the argument that it would not create a monopoly and could win regulatory approval because of "so-called news sources'' such as Google and Facebook.
However, he said those outlets aggregated content but did not create it, as local news sources did.
Craigs Investment Partners broker Peter McIntyre said while most people would be considering future content quality, he believed the decision to list and merge was being driven "by the advertising dollar''.
He noted APN's disclosure yesterday that its first-quarter earnings in New Zealand were 10% down, while in Australia revenues were up, and market growth was up 9% for the same quarter.
He raised the issue of advertisers losing a choice of media platforms to advertise with, but that would be considered by the Commerce Commission.
"Potentially, [Commerce Commission] approval could be conditional like the Z Energy scenario,'' he said of the petrol retailer buying Caltex's stations but having to sell some stations to have a less than 50% market share.
NZ media
Now
APN News & Media
Its subsidiary NZME.: The New Zealand Herald, Herald on Sunday, more than 130 radio stations including Newstalk ZB and Radio Sport, plus 23 community newspapers, more than 20 websites and apps.
Fairfax (NZ)
Stuff.co.nz, Sunday Star Times, Sunday News, Waikato Times, The Dominion Post, The Press, The Waikato Times, The Nelson Mail, The Timaru Herald, The Marlborough Express, more than 50 community newspapers, 10 magazines.
If proposals succeed:
APN News & Media: Remains listed NZX/ASX itself, concentrates on Australian assets.
Fairfax Australia: Likely stake in NZME., concentrate on Australian assets.
NZME.: By June/July becomes dual-listed entity: (principal) NZX and ASX. Operate Stuff.co.nz, Sunday Star Times, Waikato Times, The Dominion Post, The Press, The Waikato Times, The Nelson Mail, The Timaru Herald, The New Zealand Herald, Herald on Sunday, Newstalk ZB, ZM, Radio Sport. Combined: more than 70 community newspapers, 10 magazines.
Other media unaffected:
Otago Daily Times.
MediaWorks: Newshub, The Edge, The Breeze.
Bauer publishing: NZ Woman's Weekly, Woman's Day, Listener.
Sky TV.
TVNZ.
Radio New Zealand.
Gisborne Herald.
Ashburton Guardian.
