Rupert Murdoch’s News Corp and the Kerry Stokes controlled Seven West Media are attempting a national merger in one of the dodgiest business deals the country has seen under the guise of one selling assets to the other. It looks from a distance like the purchase of one Sunday paper and one website but under closer scrutiny it is another step in a national merger.
What isn’t well advertised is that News Corp and SWM are already in partnership and jointly own 23 community and regional newspapers in WA and also jointly own one-third each of Sky News Australia with Channel 9.
The Australian Competition and Consumer Commission (ACCC) are meant to stop this type of corrupt conduct but look like they might give it the rubber stamp although they have blinked in the short-term for at least the next few weeks and have asked for further submissions. The ACCC were meant to announce on Thursday if they had approved the purchase but have raised further issues and will now announce a decision on the 15th September 2016.
While the deal is focused on Western Australia and only includes one Sunday paper and one website it is an Old Media v New Media battle which will have national ramifications and anyone who uses any type of media including social media should take an interest.
If News Corp can sell WA assets while still maintaining a certain level of control and profitability from the asset sale then good luck to them. The big problem is that the company that wants the assets, Kerry Stokes’ Seven West Media (SWM), already has massive market share in all forms of media in WA and should not be allowed to increase their market share any further. Even more so given Seven West Media’s history of bribing government officials and politicians and now they want the ACCC to spoon feed them a newspaper monopoly in WA.
Reading the fine print of the deal also makes it very clear that it is actually a national merger between Australia’s 2 biggest media companies as News Corp and Seven West Media want to share content for at least four years and also share advertising sales for at least 12 months. If and when the ACCC agree to those terms, then it would be easy for News Corp and SWM to renew the deal in the future. (Click here to read more)
To be fair and balanced the ACCC have taken receipt of a number of written submissions from myself and also took time for three of their staff to have a telephone conference call with me on Thursday the 14th July to hear my concerns and submissions. They would have also done the same for other interested parties.
Background – ACCC Statement
Seven West Media already owns national media assets the Seven Network, Pacific Magazines, and interests in Yahoo!7 and Sky News Australia. In WA SWM own The West Australian, The Weekend West newspapers which publish Monday to Saturday but not on Sunday and thewest.com.au as well as 44 community and regional newspapers of which 23 papers are owned in partnership with News Corp. Seven West media also owns 11 regional radio stations in WA. (Click here to read more) It is by far the biggest media company in WA.
News Corporation is the publisher of various print media and online sites throughout Australia, including The Australian newspaper and online site News.com.au. In Western Australia, News publishes the print newspaper The Sunday Times and online site perthnow.com.au.
Seven West Media want to buy The Sunday Times which only publishes on Sunday and perthnow.com.au from News Corporation which would give SWM a virtual newapaper monopoly in Perth.
“The proposed acquisition would combine the two highest-circulating Western Australian print newspapers and related online news sites. The ACCC is investigating the impact this would have on two distinct groups: readers and advertisers.”
“A number of interested parties have expressed concern about the reduction in competition and the impact this would have on quality and diversity of content. A number of advertisers have also raised concern about the loss of competition for advertising opportunities in the print newspapers,” ACCC Chairman Rod Sims said.
“WAN and News appear to be each other’s closest competitors in print and online news in Western Australia. They compete strongly with each other to attract readers and advertisers.”
“The ACCC is seeking to understand whether the competitive tension between WAN and News is a key factor in maintaining quality and diversity of content for readers, or whether the threat of readers shifting to alternatives, particularly alternative online news sites, will competitively constrain WAN after the acquisition,” Mr Sims said.
The latest Statement of Issues by the ACCC: Seven West Media Limited – proposed acquisition of The Sunday Times publication and website from News Limited.
Response to ACCC
I will make fully detailed submissions to the ACCC in a week or so but a couple of things that I will address now are:
1. If the ACCC block the sale then not much will change. News Corp won’t stop publishing the website perthnow.com.au and The Sunday Times will continue to be published and sold for the foreseeable future. Both are important parts to News Corp’s sales strategy to national companies.
2. The fact that News Corp and Seven West Media want to share content and advertising sales confirms the transaction is a merger not a sale and on that basis alone it has to be rejected by the ACCC.
3. If the ACCC allow the purchase to go ahead then the “quality and diversity of content” will decrease in a major way. A prime example is a story that I have reported on twice which is Channel Seven in Adelaide sacking a female journalist after she complained of sexual harassment. (Click here and here to read more) The News Corp owned The Advertiser in Adelaide was the first to report on it and that type of story wouldn’t go ahead in Perth if there was no News Corp presence as no one else has run the story.
4. The suggestion that Fairfax Media and overseas online media companies will keep them honest is a joke. Media Watch has run two recent shows that are very credible that suggest there is a very good chance the likes of Fairfax Media and overseas sites such as The Guardian might not last much longer than another 12 to 18 months because they are losing their market share of ad revenue to Google and Facebook.
The ACCC have set the 18th August 2016 for final submissions and you can play your part and read this article and add your comment below and I will add it to my submissions to the ACCC.
The Australian media landscape is changing rapidly with the growth of social media. Old media such as News Corp and Channel Seven are trying to protect their monopolies or create new monopolies which undermines democracy. The Australian Competition and Consumer Commission (ACCC) have so far aided and abetted the corrupt conduct of News Corp and Seven West Media and in the next few weeks we will see again what they are up to.
The monopoly game
Seven West Media only want monopolies if they can get them as no competition means more profit. There is nothing stopping SWM from printing a Sunday paper if they wanted but one assumes they have a deal with News Corp not to compete which is something the ACCC should be looking at.
Seven’s frivolous and vexatious court cases
Seven West Media play dirty pool and try to bully the competition and recently lost one of many frivolous and vexatious defamation cases they run. This time against the ABC. (Click here to read more) Seven are also currently avoiding me in court in another frivolous and vexatious matter. That is on top of SWM’s regular court loses to the Australian Communications and Media Authority (ACMA) for false and misleading reporting on their TV stations. Unfortunately, the ACCC will not take into account when making their decision whether or not Seven’s management and owners are fit and proper people to own and run a media company.
There are a lot of issues for the ACCC to take into account but they should block the sale as the media landscape is changing fast and in 12 to 18 months there will be less competition in the media as companies continue to downsize and sack more and more journalists. And allowing what is in effect a national merger between the 2 biggest media companies in Australia won’t help the situation but make it a lot worse.
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