Video: The moment Commerce Commission boss crushes NZME-Fairfax merger dreams

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1 NEWS

The Commerce Commission has this morning declined the proposed merger between media groups Fairfax and NZME after the competition regulator came out against the idea in a draft decision late last year.

The NZ Herald, Stuff and affiliates were attempting to create a huge NZ media empire.
Source: 1 NEWS

The Commission in November said a merger would diminish the range of editorial voices and weaken competition in several advertising markets.

All eyes are now on the next moves from NZME and Fairfax after a merger was rejected.
Source: 1 NEWS

A merged company would take control of New Zealand's two large news websites - NZ Herald owned by NZME and Fairfax's Stuff.

NZME also has some big name radio stations like Newstalk ZB and ZM, as well as the country's largest circulation newspaper, The New Zealand Herald.

Today the Commerce Commission rejected an application by NZME and Fairfax to join forces.
Source: 1 NEWS

Fairfax would bring a number of major mastheads including the Sunday Star-Times, the Dominion Post and The Press.

Dr Mark Berry of the Commission said the competition in the media environment would be lessened and the benefit to the public was not high enough to proceed.

"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," he said in a release.

"However these benefits do not, in our view, outweigh the detriments we consider would occur if it was to proceed."

"This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy.

"The news audience reach that the applicants have provide the merged entity with the scope to control a large share of the news consumed by a majority of New Zealanders.

"This level of influence over the news and political agenda by a single media organisation creates a risk of causing harm to New Zealand's democracy and to the New Zealand public." 

The Commission said in its draft determination that a merger would give one entity ownership of nearly 90 per cent of New Zealand's print media, a level only surpassed in communist China.

The announcement of the final decision has been delayed several times from March, to today.

The Commerce Commission in February turned down an application by Sky TV and Vodafone to merge, saying it risked creating a strongly vertically-integrated pay-TV service and telecommunications provider, and the rejection hinged on their owning all premium sports' content.

Vodafone and Sky TV last month filed High Court appeals against the decision.

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