ACCC to approve further media mergers?

This week it has come to light that ACCC chairman Rod Sims has flagged the watchdog will more likely wave media mergers through in the digital age, if the government proposal to ease media ownership restrictions comes through.

In a recent interview, Sims said he expected there will be a rush of proposed media mergers as a result of federal Minister Stephen Conroy's proposal to remove the 75% reach rule, which currently prohibits TV broadcasters to reach more than three-quarters of the population.

         

The absolute biggest beneficiary of this will be the proposal of the partnership between Nine Network and Southern Cross. Currently, WINNBN has a partnership with Nine to convey their program offering to Regional areas of Australia, though that deal is set to expire this year. Southern cross currently has regional deals in place with Network 10, as well as Network 7 in areas where Prime does not reach (Tasmania, Northern Territory).

Currently, media companies are forbidden to own more than two out of three media platforms defined as TV, newspapers and radio. However, new technologies may lead to a broader market definition, resulting in more and bigger mergers. The ACCC have mentioned that any merger proposals would be assessed on the present circumstances and not what the future might resemble.

Of course, the other major possible media merger to have grabbed headlines in the last few weeks was a potential play for Ten Network by News Limited, which we mentioned in the last update. While this is still being denied across all of the relevant partners, the thinking is that the merger would make good financial sense in creating another multi-platform offering for advertisers and brands.

What it means for us

This is something that should be monitored closely, as it could help signal a shift in buying strategy across advertisers. Should the Southern Cross and Nine deal become concrete, then the monetary shift of spend in the regional markets will change hugely. Currently, Southern Cross receives the lesser amount of spend from big advertisers due to their lower share of audience. With access to marquee programming such as The Voice and the different sport coverage from Channel Nine, audience share will increase and advertising share will increase. Should the deal appear as if it’s coming closer, we may be cognisant to increase our spend and cement our relationship with what could become a burgeoning power in regional television.