Media voices lost in NZME, Fairfax merger would be 'virtually irreplaceable', judge says
By Paul McBeth
Dec. 19 (BusinessDesk) - The loss of diversity of voices in a merger of publishers NZME and Fairfax New Zealand would be
"virtually irreplaceable" and the Commerce Commission was within its rights to weigh up that issue in rejecting the
deal, the High Court found.
Justice Robert Dobson and lay member Professor Martin Richardson rejected the dominant publishers' appeal to overturn
the regulator's decision, saying the commission was within the law in leaning on the loss of media plurality in turning
down the transaction and agreeing that a substantial loss of that diversity of voice would be "virtually irreplaceable".
"We cannot be certain that a material loss of plurality will occur because of the factors we review that would hopefully
assist in maintaining it," the judgment said. "However the risk is clearly a meaningful one and, if it occurred, it
would have major ramifications for the quality of New Zealand democracy."
NZME and Fairfax tried to argue the reliance on the loss of media plurality was outside the regulator's legislative
framework, and that even if it was within it, the quantifiable benefits of the deal were such as to warrant approval.
Justice Dobson disagreed, saying the statute didn't constrain the regulator and that a balanced approach was needed in
weighing up the benefits against the detriments.
The judge and lay member accepted that there would probably be "a material extent of retrenchment of journalistic and
editorial resources" if the merger was rejected, but that the presence of competition influenced that downsizing.
By approving a dominant media player in New Zealand's market, there was a "larger risk" that "financial imperatives will
pressure a significant loss of plurality" against the aspirations of the editorial staff, the judgment said.
That would ultimately lead to a lower quality of news production as the merged entity sought to cut costs, and would
create a "significant unquantifiable detriment".
What's more, the $200 million of quantifiable benefits wouldn't be available to New Zealand "in the sense that it
accrues for the public good and could somehow be committed, if necessary, to provide substitute forms of media plurality
by way of public broadcasting initiatives."
Justice Dobson and Professor Richardson said unquantifiable costs and benefits couldn't be weighed against their
quantifiable counterparts, and that "concerns for the preservation of media plurality as a support for a strong
democracy, when measured as to its impact on the whole economy, has a significance that outweighs the significant
quantifiable benefits that have been acknowledged."
Weighing that up, they found the likely loss plurality and the prospect of lower quality content justified "greater
weight than the quantifiable and unquantifiable benefits we have identified."
(BusinessDesk)