26 Nov 2016

The empires strike back

From Mediawatch, 11:11 pm on 26 November 2016

Editors at two big media companies seeking to merge are all of one mind on the issue. But many of their predecessors are in the other corner - along with the competition watchdog

no caption

Photo: RNZ

Increasing competition for declining revenues prompted our two biggest publishers - Fairfax Media and NZME - to propose a merger earlier this year.

The Commerce Commission came out against it last month, citing a possible drop in the quality and variety of journalism alongside the economic aspects.

The NBR’s Tim Hunter reckoned it was a knockout blow.

“They have a choice: take the count and slink away, or get up and go another round,” he wrote.

Tim Hunter, who has worked for both companies in the past, reckoned they should give up.

“But they will probably stagger to their feet to take more punishment,” he predicted, extending his boxing analogy.

He was right. They haven’t thrown in the towel.

Read all about it

Interested parties were given until this week to respond to the Commission, but their responses were for public consumption too.

On Thursday, 11 former editors backed the competition watchdog and urged it to stick to its guns for the final decision in March.

“A merger is seen by some of us as a pragmatic response to the singular challenges that newspapers face (but) we all accept that the destruction of great mastheads  . . . cannot possibly enhance content – it can only diminish it,” said their submission.  

Some New Zealand Herald editors dismissed their intervention:

The following day Fairfax and NZME newspapers published a response to the Commerce Commission which was pitched a little more respectfully.

“We, a group of more than 30 New Zealand editors, are writing to say, with respect, you are wrong. We believe that you have misinterpreted the state of New Zealand journalism.”

The state of it is not good, they said, without the merger they believe to be “the best chance for a more sustainable and strong foundation for supporting local journalism”.

“The rosy view that news and newspapers will exist tomorrow because they exist today is misguided,” they wrote.

One view fits all

One of the Commission’s concerns was that a single company would mean fewer points of view in the media, and that would be bad for society.

The editors’ open letter acknowledged the apparent irony of almost every senior editorial staffer at each company signing off on the same view of the merger.

“Rather than proving the point a  . . . merger would result in a lessening of diverse editorial views, it should be seen as a reflection of the deep concern we have that your decision to reject the merger will inevitably spell the end of our ability to maintain quality national and local journalism at scale for New Zealanders,” the letter said.

The editors also argued their letter was actually an expression of editorial independence because it was written without input from company bosses or shareholders.

“We are speaking as editors whose only concern is the protection of journalism and journalists,” they said.

However, many of those journalists don’t back the merger. that's not surprising, given that it would extinguish hundreds of their jobs.

Some responded like turkeys told Christmas had been cancelled when the Commerce Commission’s draft decision came out.

One wrote to Mediawatch to say:

“I agree with the (Commerce Commission's draft) determination, especially about the merger hurting editorial diversity. Yet I worry that neither company can survive past a few years.”

But you won’t find views like that published in NZME or Fairfax papers on this issue.

Rod Oram in the Sunday Star Times was a lone voice opposing the merger in Fairfax or NZME outlets.  

Buying time for take-off

A merger of Fairfax Media and NZME would mean both companies would lose their main digital competitor - each other.

The editors’ letter said that would give both companies “time for digital revenues to grow and new business models to emerge”.

That echoes the management concept about building a new plane while the existing one is still flying.

But in a lecture last Thursday, former TV3 news boss Mark Jennings saw the companies as planes looking for a longer runway waiting for take-off.

“The plane would rumble down the runway for longer but eventually it crashes. A merger wouldn’t stop Facebook, Google and Twitter taking all the money,” he said.

Disaster strikes - and focuses minds

It wasn’t just the Commerce Commission’s deadline that prompted this debate about the merger.

After the big quake hit on November 14, plenty of pundits pointed out how important it is to have news media up to the task of fully reporting a national emergency.  

When Fairfax’s stuff.co.nz published the editors’ open letter online, it was laced with photos of Fairfax journalists reporting the quake aftermath and even delivering papers on the ground in the affected areas.

“We will continue to do the best we can with the resources we've got, but the industry is changing," the editor of Fairfax Media’s Dominion Post told Mediawatch last week.

"The one certainty in the media industry is that it is going to shrink," said Bernadette Courtney, making the case for the merger.

"The hard, cold fact is we cannot sustain journalism in every community as we do now," she said.

RNZ chief executive Paul Thompson echoed that in an opinion piece for The Press prompted by the quake.

“No longer should we assume that the journalism will always be there when we need it,” he said.

While Paul Thompson  - a former Fairfax chief editor - didn’t express an opinion on the merger, earlier this year he said a loss of some of competition and “a significant decline in the variety and diversity of news that’s available” were both risks.

News at the core?

When the merger hopefuls responded to the Commerce Commission's recent knockback, they also responded with a joint statement.  

They said the Commission had "failed to properly take into account the diversity of opinions that will continue post-transaction in an increasingly converged digital world."

But that statement didn't mention the national importance of professional news and journalism.

When the company owning The New Zealand Herald and Newstalk ZB was re-named in 2014, it became NZME - New Zealand Media and Entertainment.  No reference to news there either. 

It describes itself "New Zealand’s leading media and entertainment business" offering "the content Kiwis want - where and when they want it." 

Perhaps the most chilling line in the Fairfax / NZME editors’ open letter to the Commerce Commission is this one:

“We believe - no, we know - that the rapid dismantling of local newsrooms and journalism at scale in this country is inevitable if this merger does not proceed.”

In other words, the Commerce Commission hasn’t cancelled Christmas for the turkeys, just postponed it - and possibly not for long.

The Commerce Commission and the merger hopefuls will meet in a special conference starting on December 6. The Commission's final decision on a merger is due in March 2017.