The merger of Fairfax Media and Nine Entertainment is good for media diversity, good for journalists, good for the Australian public, and demonstrates the benefits of the Turnbull government’s media reforms.
An unemployed journalist who once worked for a newspaper that’s gone out of business isn’t doing much to add to media diversity. That’s the reality that those who harken back to the days before the internet, Instagram, and mobile phones fail to grasp.
The journalists’ union is wrong. The Media, Entertainment and Arts Alliance yesterday announced it opposed the merger because supposedly “it harms the ability of an independent media to scrutinise the powerful, threatens the functioning of a healthy democracy [and] undermines … quality journalism.” The merger is the best opportunity any journalist currently working at Fairfax Media has of keeping their job. True, it will now be a job at “Nine” not “Fairfax” – but good reportage and good writing will always be read and will always have a market regardless of who’s publishing it. Certainly it’s sad to lose the history of a name, but the end of the name “Fairfax Media” is no less sad then when David Syme and Co became a subsidiary of John Fairfax and Sons Ltd in the 1980s.
It was Fairfax Media as a stand-alone company that announced last year it was cutting 115 newsroom staff from The Sydney Morning Herald, The Age, Brisbane Times and WA Today. A media company’s “independence” doesn’t guarantee anything, and it definitely doesn’t guarantee its survival. The only media company in Australia guaranteed to survive (for the time being) is the ABC. The ABC survives because the political retribution it threatens against any political party contemplating reducing its taxpayer funding. The way that today the ABC board talks of the need for the ABC to continue to exist is reminiscent of how Sir Frank Packer talked in the 1940s of the “birthright” of his magazines to receive access to government-rationed newsprint in preference to his competitors.
If the ABC truly is the much-beloved national institution that its supporters claim it to be, presumably the consumers of the products the ABC provides would happily and voluntarily choose to pay for those products.
The biggest threats to the functioning of democracy in Australia come from what governments do, not from what commercial media companies decide to do. Defamation laws, legislative restrictions on reporting put in place under the guise of “national security”, judge-ordered suppression orders on court proceedings, and provisions such as Section 18C of the Racial Discrimination Act are all the product of government decisions.
The Fairfax/Nine merger is also a win for taxpayers. It should put to rest, for the time being, the suggestion contemplated last year during the Senate inquiry into the future of public interest journalism that taxpayers should provide financial assistance to bail out ailing newspaper companies. It’s ironic that it is often suggested that one way of ensuring the existence of an “independent” media is to have the government fund it.
The point of the merger is that it will allow the new entity to get new customers, viewers, readers, and listeners in a way that by themselves neither Fairfax or Nine could do. Of course the merger might not work, and most mergers don’t – but a merger is better than the alternative.
The combined Fairfax/Nine with a market capitalisation of around $4 billion will also be of a size better able to compete with the overseas media behemoths. However to put this into perspective, the market capitalisation of, for example, Netflix is in equivalent terms $216 billion. Reed Hastings the CEO and co-founder of Netflix owns around 2.5 per cent of the company. Hastings’ net worth is more than the market capitalisation of both Fairfax Media and Nine Entertainment combined. Apple, Alphabet (the parent company of Google), and Microsoft each have a market capitalisation in Australian dollars of more than $1000 billion ($1 trillion).
Whether any Australian media company will ever be able to compete with the might of such organisations is an open question, but almost certainly the new “Nine” media company will stand a better chance of doing so than Nine and Fairfax standing alone.