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Watchdog delay on Fairfax-NZME decision

NZ NewswireNZ Newswire 21/08/2016 Jonathan Underhill

The Commerce Commission has delayed its decision on the proposed merger between local media giants NZME and Fairfax, saying the deal is complex and it needs more time to assess the impact on both news and the advertising market.

The regulator had been scheduled to make a decision on Monday but says it will now release a draft determination in early November ahead of a possible public conference in December.

A final decision will be made on or before March 15 next year.

The commission was still assessing the effects of the proposed merger on areas such as national, regional and local news, including the impact on the quality, accuracy and range of the news media, it said in a statement.

"In addition, the commission is assessing whether the proposed merger would enable the parties to increase prices to advertisers and consumers."

The commission received 50 submissions on the merger application, including many that opposed various aspects of the deal.

In response Fairfax and NZME said some submitters had strayed from the competition framework laws.

They also argued that there was little objection from advertisers, suggesting a competitive advertising market would remain if the two media groups are allowed to combine.

Media companies had to attract audiences with content in order to be attractive to advertisers, whose spending, in turn, funded the content, there were economic reasons to maintain the quality and diversity of content, the companies claimed.

A merger would combine NZME's flagship New Zealand Herald newspaper and nzherald.co.nz website, a portfolio of radio stations including Newstalk ZB and the GrabOne daily deals site with Fairfax's suite of newspapers including the Sunday Star-Times, The Press, the stuff.co.nz website and magazines including NZ House and Garden.

NZME listed on the NZX as a stand-alone New Zealand media company in June after being spun off from APN News & Media through the issue of shares to APN's existing shareholders.

The shares listed at $1 but by July 13 had dropped to a low of 69 cents and were last at 84c.

Rupert Murdoch's News Corp is a 14.99 per cent shareholder in NZME.

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