Australia's Media Sector Is Poised for a Wave of Mergers
September 14 2017 - 4:59AM
Dow Jones News
By Rob Taylor
CANBERRA, Australia--Australia's media sector is poised for a
wave of mergers after legislators agreed to the most sweeping
shakeup of ownership controls in decades, hoping to help struggling
outlets compete with digital rivals like Google and Netflix Inc.
(NFLX).
Key independent Nick Xenophon, whose NXT Party wields bargaining
power in the Senate, struck a deal with the conservative government
to pass the reforms in return for funding to help smaller
publishers and newsrooms employ more journalists.
Sen. Xenophon said the negotiations to shake up laws put in
place three decades ago were "the most difficult and protracted and
robust" he had undertaken. "The significance of this agreement
should not be underestimated," he said. The legislation passed 31
to 27.
Australia's traditional media outlets, including Wall Street
Journal publisher News Corp, have been hard hit in recent years by
falling advertising revenue as audiences embrace digital platforms.
Newspaper circulation has declined sharply as well.
The reforms, opposed by the opposition Labor Party, will abolish
a 75% audience "reach rule" that had prevented free-to-air
television networks like Nine Entertainment Co., Seven West Media
Ltd. and the Ten Network Holdings Ltd.--recently acquired by U.S.
television behemoth CBS Corp.--from buying regional affiliates that
could access more than three quarters of the population.
They also removed a two-out-of-three rule that prevented large
media companies from controlling free-to-air TV stations,
newspapers and radio stations in the same market.
The reforms could give fresh impetus to a counterbid by News
Corp Co-Chairman Lachlan Murdoch and Australian media entrepreneur
Bruce Gordon to CBS Corp's A$201 million buyout of Ten Network
Holdings, with both opposing the proposed deal in the Australian
courts.
As part of the deal, Treasurer Scott Morrison agreed to ask the
Australian Competition and Consumer Commission to conduct an
inquiry into the impact of Facebook and Google on the traditional
media industry, adding to a slew of inquiries by lawmakers into the
tax affairs of both internet giants.
Media companies who unanimously supported the reforms argued
existing controls were no longer relevant against new digital
streaming platforms like Netflix, Google and Apple, as well as
global media firms like The New York Times, BuzzFeed and the
Guardian who have set up newsrooms in Australia.
News of an impending deal to end months of protracted political
wrangling saw media stocks rise Thursday, including Southern Cross
Media Group Ltd., Fairfax Media, Seven West Media and Nine
Entertainment. Speculation has swirled that Fairfax and Nine could
be first off merger blocks after passage of the reforms.
Write to Rob Taylor at rob.taylor@wsj.com
(END) Dow Jones Newswires
September 14, 2017 04:44 ET (08:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Seven West Media (ASX:SWM)
Historical Stock Chart
From Jul 2024 to Aug 2024
Seven West Media (ASX:SWM)
Historical Stock Chart
From Aug 2023 to Aug 2024