TVNZ chief executive Kevin Kenrick probably won’t know whether to laugh or cry when he reads the latest submission to the Commerce Commission from the StuffMe merger partners.

He is quoted, liberally, in support of Fairfax and NZME’s argument that changes in the media landscape demand they be given authorisation to merge their businesses – which include the New Zealand Herald, NewstalkZB, and , the Dominion Post, the Press and Sunday Star-Times.

TVNZ argued against the merger. It sees the combined digital beast of and as too dominant in the New Zealand news market. 

So for Kenrick to read this in StuffMe’s latest pleading: “TVNZ’s CEO Kevin Kenrick could have been speaking as CEO of NZME2 or Fairfax or NZME” when he commented last week on change in the digital media market, must have been galling.

The submission quoted an interview Kenrick had given (although oddly StuffMe chose to redact the source) in which he said TVNZ needed to keep its priority on both local content and investing in news. Adapting to shifts in competition had been required for some time and TVNZ felt it was better positioned than some other media.

StuffMe’s submission said: “Indeed, his comment that different players have “more or less runway within which they can make the change” may even be a direct reference to the comments at the [Commerce Commission public conference] by the parties.”

“Nothing in this interview suggests TVNZ will not continue to be a strong competitor in digital news/information into the future if the [StuffMe merger] were to proceed.”

TVNZ is currently restructuring to reduce its costs. Kenrick’s comments relate to its need to direct its money onto content, not to overheads or support costs.

The broadcaster and its TV competitor, MediaWorks, both told the Commerce Commission a merged Fairfax-NZME would present a digital competitor too big and too dominant to compete against. They argued their own digital news operations were secondary to their broadcast news programming.

Fairfax and NZME’s latest salvo at the Commission has had one direct outcome. The commission has delayed a decision by another three weeks, taking the day of judgment to May 2. That will be one week short of a year since the application landed.

The latest StuffMe submission is remarkable, again, for its efforts in talking down NZME and Fairfax’s individual situations at the same time as the companies publicly talk up their performances.

The submission highlights revenue and newspaper circulation declines. Headlines in the companies’ sites in past weeks did precisely the reverse, with sunny and upbeat stories about strong relative performances in advertising and readership.

It does not let Kenrick’s comments go. “TVNZ’s CEO correctly makes the point that ‘TVNZ is in a strong position’.”

“This is true. It has a strong tradition of news and information delivered via video which is the primary growth area for mobile users.” TVNZ’s ad revenues were off just 3.3 percent year on year, compared with the 8 percent decline for NZME in print and digital ads.

Central to the latest paper is NZME and Fairfax’s view that the Commission has taken too dark a view of the detriments of the merger while downplaying the benefits. “The Commission must weigh all other public benefits arising from the transaction, including not only the quantified synergies but also the benefits that arise from facilitating the sustainability of a scale media organisation including to:

– journalism


-investors on the NZX

– government/people by sustaining a media organisation that provides employment to New Zealanders and pays taxes in New Zealand.

The two companies continue to chide and tick off the Commission, warning against “any other decision through the use of an outdated framework for analysis that does not properly grapple with the structural declines in media.”

In its draft rejection of the merger application in December, the Commission expressed concern about media plurality – the number and diversity of views, approaches, sources available to New Zealand journalism if the two biggest print/digital firms joined.

Fairfax and NZME continue to argue “plurality” will be improved or significantly improved in five of the six areas they identify as requiring plurality, the outlier being “gender equality” which gets a neutral ranking.

They say the Commission could be embarrassed internationally if it confirms its draft view. “A backward-looking focus on ‘external plurality’ will be seen by any international observers to be illogical and incomplete.”

The parties say the type of digital advertising going to Facebook and its ilk is increasing (up 46 percent year on year), as is the type of advertising for online video (up 29 percent) which favours TVNZ and MediaWorks, whereas online display advertising is down (off 3 percent).

“The Commission needs to reflect those in-market revenue trends and forecasts in its forward-looking assessment of the future for [NZME and Fairfax] and what that means for media quality, diversity and plurality.

“Speculation and optimism, without any robust evidential foundation, does not provide a basis for disregarding in-market commercial realities.”

That has been the tone and the message from the two companies to the Commission for months as they have attempted to turn around its preliminary view.  

This paper also claims the savings they would make in publishing would enable StuffMe to reinvest more money into associated non-content products such as StuffFibre, Fairfax’s broadband offering, and GrabOne, an NZME daily deals shopping and services site.

In a grand circle, more money made from StuffFibre and GrabOne could later be used to invest in publishing and content.

Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland, and media. Twitter: @tmurphynz

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