Australia's Nine Entertainment, which owns a popular TV channel and a streaming service, has announced plans to form a new media empire with premium paper owner Fairfax Media. Not everyone is thrilled with the idea.
Two large media companies in Australia, Nine Entertainment and Fairfax Media, announced a merger to create a new multimedia entity which would own TV and radio channels, premium papers, a large streaming service, and online news outlets on Thursday. The company, to be called simply Nine, would be worth 4 billion Australian dollars ($2.97 billion, €2.53 billion).
Both of the pre-existing companies have been facing shrinking revenues and pressure from the competition.
The move "unlocks the potential for significant value creation by combining the content, brands, audience reach and data," they said in a statement.
In Australia, Nine Entertainment is best known for its TV channel while Fairfax Media owns popular daily papers such as the Sydney Morning Herald and The Age. Nine Entertainment also owns Netflix's Australian rival, Stan, and a profitable real estate website, both of which will become assets of the new company.
Turnbull praises merger
The deal still needs approval by shareholders and state regulators, although both companies expect it to be finalized by the end of 2018. Such moves were only made possible by the government last year, when a media ownership law was changed to allow individual firms to own radio, television, and print outlets in the same city.
Australia's Prime Minister Malcolm Turnbull, who once worked as a journalist with Channel Nine, welcomed the deal on Thursday.
"Fairfax is a great Australian company, newspaper company," he told LAFM radio station. "The Nine Network, of course, is the first television station to be on air," he added of the TV channel that was first launched in 1956.
"I think bringing them together enables two strong Australian brands, with great, long traditions, to be able to be more secure."
Fairfax employees slam the 'takeover'
However, Australia's former Prime Minister Paul Keating slammed the merger of the reputable Fairfax group with Channel Nine in a scathing statement, saying that the TV channel "has never, other than displayed the opportunism and ethics of an alley cat."
"Through various changes of ownership, no one has lanced the carbuncle at the center of Nine's approach to news management." Keating wrote. "And, as sure as night follows day, that pus will inevitably leak into Fairfax."
The union representing Fairfax journalists urged officials to block the deal, which would see the shareholders of Nine Entertainment own 51.5 percent of the new company and its CEO lead the new entity. Other employees complained of the disappearance of the long-established Fairfax name. The company was founded in 1841.
The alleged merger is actually a takeover of Fairfax which "threatens the editorial independence of great newsrooms," said the Media Entertainment and Arts Alliance (MEAA).
It will be "bad for Australian democracy and diversity of voices in what is already one of the most concentrated media markets in the world," they said.
dj/rc (AP, AFP, dpa)