Govt considering changing law to help media companies merge
Stuff reports:
High-level talks are underway over Government backing for a new bid from NZME to buy Stuff, it is understood.
The Government has been lobbied by NZME over whether it can find a way to further its chances, Government sources have confirmed.
One of the country’s biggest media organisations, NZME owns the New Zealand Herald and Newstalk ZB.
The talks are understood to include proposals for a “Kiwishare” arrangement, similar to that last used by the Crown to protect free local calls and fixed phone line rentals when Telecom was privatised in 1990.
That’s a good comparison because in fact the Kiwishare obligation turned into a nightmare that actually hindered competition by forcing rivals to fund Telecom.
Effectively, the arrangement could ringfence Stuff’s editorial operations and protect local journalism.
That would answer concerns raised by the Commerce Commission in 2017 when it rejected a merger proposal on the grounds of a loss of a plurality of voices in New Zealand journalism.
The Kiwishare arrangement would potentially overcome that hurdle but it is one of several options being considered, including bypassing the commission or doing nothing.
Why do you need the Government involved? NZME can try and persuade the Commerce Commission that such an arrangement will meet their concerns, but I doubt it will get anywhere.
Another option being considered is that the Government could issue some sort of directive to the Commerce Commission that could make it view another bid more favourably. Or it could override the commission’s decision through legislation.
Stuff understands that the Government isn’t keen on the precedent either of these options would create.
The last Government that tried to overturn a Commerce Commission decision by legislation got a black nose as the “Axe the Tax” coalition ran a very good campaign against it.
Politicians should not pass laws to overturn decisions they don’t like of independent competition regulators.