Media mergers

Monopoly — the Australian media game, not the board game — is being plonked down on the tables of board rooms and the cabinet table. The pieces are being shaken out of the box and laid out with a final tinge of excitement and anticipation.

The pale and mostly male boomer members of the Media Monopoly Players and Rent-Seekers Association gathered in Canberra last week to lobby in support of the federal government’s proposed changes to media ownership regulation. These changes would end the cross-media ownership rules that have restrained media-wide monopoly since the 1980s.

The rule changes would give merger and acquisition and consolidation one last adrenaline shot. Shares and companies will change hands for inflated prices. Executives will take generous payouts. Shareholders will get to cash in. Winners all.

But we already know who will lose: readers, journalists and democratic debate. There’ll be fewer journalists and less diversity, all lost at a faster rate than may otherwise be the case.

A couple of off-Broadway tryouts in the past six months already show how deleterious monopoly can be, and how important continued regulation is.

Let’s start in Perth. Last November, the News Corp-owned Sunday Times (and online Perth Now) was acquired by Seven West Media. Although News Corp is a dominant global player, in the west it was still the scrappy outsider, publishing the state’s only Sunday paper against The West Australian’s Monday-to-Saturday schedule. Murdoch’s purchase of the Sunday Times back in 1955 was one of his first, tentative expansionary steps out of Adelaide. This competition — and the local ownership of the West — always gave the Perth media scene a strong local presence.

This now tightly held monopoly has already resulted in about one-in-four Perth newspaper journalists losing their jobs. Before the shake-out, about 225 journalists worked for the two papers — already down by about a third from a decade earlier.

In mid-2016, 37 journalists were made redundant from the West. In the November acquisition, only about half the 50-odd Times journalists were taken into the merged newsrooms. About 100 printers lost their jobs out of the closure of News’ print facilities.

Or look at regional Queensland. In November last year, News Corp was the buyer, not the seller, absorbing APN’s Australian Regional Media (ARM) arm with its 12 regional daily newspapers and 60 community newspapers in Queensland and northern New South Wales. This gives News a newspaper monopoly stretching from Cairns to Coffs Harbour. It followed the appointment of Michael Miller as News Corp’s Australian head out of APN about a year earlier and contributed to the company’s small income boost last year.

Again, job losses have followed — although more within News Corp than ARM. In March, about nine of 54 editorial staff at the Gold Coast Bulletin were made redundant. ARM has historically operated regional papers at a lower cost than News Corp, including lower rates of pay and journalist gradings. It operated a centralised subbing pool at Maroochydore on the Sunshine Coast.

Last week, News Corp announced a Queensland-wide media buying offer bringing together ARM with the News Corp products under the QPower brand, which the company claims will reach 87% of Queenslanders. Not that’s a monopoly!

This ownership is likely to result in further cost savings — and loss of localism — as part of News Corp’s $40 million savings goal. As always, fewer journalists. Less news.

Like all other mergers, both these mergers had to be waived through by the Australian Competition and Consumer Commission (ACCC). The ACCC has historically looked at media mergers from an advertisers’ point of view and, in both cases, pointed to declining reliance on papers by advertisers. It has never seen diversity of ideas and debate has part of its remit.

However, the ACCC’s New Zealand equivalent, the Commerce Commission, saw things differently when APN (trading as NZME) and Fairfax sought to merge their newspaper operations across the Tasman to create a New Zealand-wide monopoly. Last month, commission chair Mark Berry rejected the proposal, pointing directly to the need for diversity, saying: “Our primary concerns remain that this merger would be likely to reduce both the quality of news produced and the diversity of voices (plurality) available for New Zealanders to consume.

“Competition between NZME and Fairfax leads them to produce higher quality content than would otherwise exist with the merger. This competition incentivises investment in editorial resources, motivates journalists and editors in their day-to-day work and acts as a safeguard to plurality.”

Monopoly is the lazy, 20th century response to the challenges the media faces. Now, journalism depends on investment in quality. Barriers to entry are low. Mergers may produce some short term gain for media owners. But they come at the expense of the competition in diversity that drives quality, particularly at the local level.