Fairfax CEO Greg Hywood
Call it Fairfax CEO Greg Hywood’s quixotic New Zealand media adventure. The New Zealand Court of Appeal has handballed another tough decision to the board of the pre-merged Nine Entertainment and Fairfax Media by rejecting the final attempt from Fairfax to merge with its Kiwi print and radio rival, NZME.
That merger would have meant one fewer tough decision for Nine once the marriage was consummated in November. Fairfax has been pushing the NZ hook-up since 2016, and despite being rejected by the Kiwi regulator (the Commerce Commission) and then the Supreme Court, they then took it to the Court of Appeal in June. This was probably done as a way of demonstrating their charity in financing a section of New Zealand’s struggling media, but also holding out the prospect to the Nine board that a sticky problem was being dealt with.
No more. The Supreme Court decision was never going to be overturned, but Hywood decided for some reason to get out the whip and flog the non-starting merger one last time in the middle of winter across the Tasman.
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“The decision is not the outcome we wanted,” Hywood said in a statement. “We believed the merger as proposed would have delivered significant synergies and sustained at-scale journalism in New Zealand for many years.”
This is an unwanted headache for Nine CEO Hugh Marks. Stuff (Fairfax’s New Zealand imprint) joins Fairfax’s community and regional papers as assets unwanted by Nine. Marks made this clear immediately at the time of the merger’s announcement and no amount of tap dancing has changed that view since. Stuff has been busy shutting, merging and selling 28 of its small Kiwi papers and getting rid of staff since February. Now the merger is off, the big cuts will come.
That certainty will make for a very tough 2019 as Marks and his board try to reshape Fairfax Media back to the assets they really want — the other half of the streaming service Stan, the 54% stake in Macquarie Media with its Sydney, Melbourne and Brisbane radio stations, and perhaps the metro papers.