The board of Nine Entertainment remains confident the $4bn merger with Fairfax Media will be approved by the publishing company’s shareholders on Monday, Nine’s annual general meeting has heard.
The Australian Competition and Consumer Commission approved the deal last week despite indications it would reduce competition.
“This merger can be seen to reduce the number of companies intensely focusing on Australian news from five to four,” the ACCC chairman, Rod Sims, said. “Post the merger, only Nine/Fairfax, News/Sky, Seven West Media and the ABC/SBS will employ a large number of journalists focused on news creation and dissemination.”
Nine chairman Peter Costello and CEO Hugh Marks having their post AGM press conference up on level 9 of the Ashurst building at 5 Martin Place. pic.twitter.com/3c3oBeMvsN
— Stephen Mayne (@MayneReport) November 14, 2018
The final two hurdles left are the Fairfax shareholders’ meeting on Monday and formal approval by the federal court.
But Nine Entertainment’s chief executive, Hugh Marks, and chairman, Peter Costello, told shareholders they expected a positive result out of Monday’s meeting and the new company would be up and running by 10 December.
“The combined publishing business will reach 8.1 million Australians each day and have a revenue base of more than $500m,” Marks said. “[That is] a proposition that, from an advertising perspective, will be very competitive with Facebook in the Australian market – but through a premium content, brand safe environment.”
Marks said the deal would would also give the legacy mastheads, which include the Age, the Sydney Morning Herald and the Australian Financial Review, more of a chance of competing with Facebook and Google.
Former treasurer Peter Costello, who will chair the new media giant, was talking up the benefits of a merger to both companies.
“The Fairfax shareholders will vote on the merger next week and we are confident they will support it,” Costello said.
Marks said the merger was never about cutting costs – despite an expected cost saving of $50m – and he expected the two business to co-exist happily.
The Australian Shareholders Association, the Council of Superannuation Investors and share proxy advisers CGI Glass Lewis, ISS and Ownership Matters are all in favour of the merger, according to a report in the Australian Financial Review.
But the Media, Entertainment and Arts Alliance, which represents Fairfax journalists, remains a critic as it fears a loss of independence, diversity and jobs.
Former prime minister Paul Keating, a long-term critic of Nine, says the ACCC has consigned the Sydney Morning Herald, the Age and the Australian Financial Review “to the ethical dustbin of Channel Nine”.
“A low-rent news organisation, Channel Nine, will have editorial command of the major print mastheads in the country,” Keating said last week. “This will poison quality journalism; but more than that, remove chunks of local specific political issues, normally covered by newspapers, from the political debate.”
Marks told the shareholders’ meeting that Keating’s comments were “misplaced” and the former prime minister did not understand how a modern media business operated.
He said Nine and Fairfax had different styles of journalism that were produced for “different purposes”.
Marks maintains he wants Fairfax Media’s mastheads to retain their independence because that is what allows them to produce quality journalism.
Marks said Netflix’s local competitor Stan, a joint venture with Fairfax, already had 1.2 million active subscribers and would easily accelerate to 2 million to 3 million subscribers under the merger.
“I can’t think of another domestic business with such rapid subscriber growth at scale over that period,” Marks said.
Shares in Nine Entertainment, which have lost more than a third of their value since July, were 2c, or 1.3%, higher at $1.595.
