Fairfax-Southern Cross deal comes under ACCC scrutiny
Aug 14
The Australian Competition and Consumer Commission has begun inquiries into the $480m purchase of Southern Cross Broadcasting‘s assets by Fairfax Media, having sent letters to consumers and advertisers seeking comment on the deal.
The inquiry, which is the first major test conducted by the ACCC since media ownership rules were removed earlier this year, focuses on the potential for the lessening of competition and changes to the quality of news.
Macquarie Media announced in June plans to buy Southern Cross, which owns a network of talk radio stations and the Ten Network regional TV affiliates, for $1.3 billion. But Macquarie then intends to sell the talk radio network — including Melbourne’s 3AW and Sydney’s 2UE – to Fairfax Media, owner of The Age and Sydney Morning Herald for $480 million.
The ACCC’s letter said that aggregation of media ownership in Melbourne and Sydney was “of critical importance” to its assessment of the deal.
It now wants to know if the deal “will cause the quality of news and other content (or the overall quality of media products) to decline due to less competition”. It also wants to know if it will “cause the price of advertising to increase due to less competition” and if there could be other adverse effects arising from the control of content.
The ACCC is also after information on the reading and listening of consumers in Sydney and Melbourne, asking what they would do if a paper or broadcast fell or rose in quality. It also wants to know the importance of local news to consumers. Generally, it asks if Fairfax will be able to bundle advertising packages “in a way that will cause anti-competitive harm in the market”.
Comments are due by next Monday.
More details about the ACCC inquiry can be found here.
Source: The Australian
MediaSpy users are discuss the Fairfax-Macquarie-Southern Cross deal in the Southern Cross Radio and Regional TV threads and the Radio and Print forum.
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Lepatron August 14th 2007