Failed merger in New Zealand could lead to layoffs, while threat of job cuts in Australia leads to walkout of journalists at Fairfax
NZME and Fairfax New Zealand were informed today that their merger was declined by the New Zealand Commerce Commission, now both newspaper companies will decide on whether to appeal, or follow through on layoff threats
The New Zealand Commerce Commission has decided to disallow the proposed merger between NZME (New Zealand Media and Entertainment) and Fairfax New Zealand. Meanwhile, in Australia, a walkout has occurred of journalists at Fairfax Media after the company announced that it would cut 125 positions at its stable of newspapers, which include The Sydney Morning Herald, The Age (Melbourne), the Canberra Times.
NZME, which owns the NZ Herald, and Fairfax, which owns stuff.co.nz and the Sunday Star-Times, have had their effort to merge stymied by the New Zealand Commerce Commission (NZCC).
“We are disappointed by this decision and will now take the time to carefully review the NZCC’s reasons for the decision,” said Fairfax Media Chief Executive Officer Greg Hywood. “This decision does nothing to address the challenge of the global search and social giants, which produce no local journalism, employ very few New Zealanders, and pay minimal, if any, local taxes.”
Hywood said that the failure to approve the merger would lead to “an even greater focus on cost efficiency” — meaning possible staff cuts in New Zealand.
The NZCC hinted that the merger would be prevented in November as the merger would be likely “to substantially lessen competition in advertising and reader markets.” After that determination, both media companies submitted dire warnings about what might occur if the merger was not approved. The Commission, however, was not persuaded.
“Following our draft determination the applicants significantly altered their submission on what the state of the market would look like without the merger. The details of those submissions are confidential; however, we do not consider the scenarios presented to be likely outcomes. In our view, without the merger NZME and Fairfax will be increasingly focused on their online businesses as their print products diminish in number and comprehensiveness over time,” Chairman Dr Mark Berry said.
“We accept there is a real chance the merger could extend the lifespan of some newspapers and lead to significant cost savings anywhere between $40 million to around $200 million over five years. However these benefits do not, in our view, outweigh the detriments we consider would occur if it was to proceed.”
NZME CEO Michael Boggs was also pessimistic, though he did not come right out and announce staff cuts.
“We will be carefully reviewing the NZCC’s full written decision and over the next few weeks we will be considering our options,” Boggs said.
Both parties could still appear the ruling.
Journalists at Fairfax Media have walked out over proposed newsroom cuts that could eliminate 125 positions. The cuts equal a quarter of all newsroom positions at the Australian newspapers.
“Our three publishing businesses maintained an intense focus on cost reduction, a stronger emphasis on digital publishing, and made progress in building new revenue opportunities,” said Fairfax Media Chief Executive Officer Greg Hywood in February. “We are pleased with the continued profitability of our publishing businesses in the face of the largest structural change in the industry’s history. This is a remarkable performance which few publishers globally have matched.”
But in April the company warned of more cuts that would effect The Sydney Morning Herald, The Age, Brisbane Times and WAToday newsrooms.
“The primary focus of Fairfax Media over recent years has been to lay the groundwork for the creation of a sustainable publishing model. We are now within reach of that goal,” Fairfax Media’s Managing Director of Australian Metro Publishing, Chris Janz, said. “Including non-staff costs the proposal is expected to deliver approximately $30 million in annualised savings with the majority of these savings expected in the 2018 financial year.”
As a result, newsrooms in Sydney and Melbourne held a meeting where staff voted to go on strike for seven days beginning immediately.
— Marcus Strom (@strom_m) May 3, 2017
“People were talking about a 48 hour strike and trying not pissing off readers,” said one Fairfax Media journalist told BuzzFeed. “But we wanted to send a proper message: You cannot keep doing this, there is nothing left to cut.”