The Australian Competition and Consumer Commission has released a Statement of Issues on the proposed acquisition of The Sunday Times and perthnow.com.au from News Corporation (ASX:NWS) (News) by West Australian Newspapers (WAN), a wholly owned subsidiary of Seven West Media (ASX: SWM) (SWM).
The proposed acquisition would combine the two highest-circulating Western Australian print newspapers and related online news sites. The ACCC is investigating the impact this would have on two distinct groups: readers and advertisers.
“A number of interested parties have expressed concern about the reduction in competition and the impact this would have on quality and diversity of content. A number of advertisers have also raised concern about the loss of competition for advertising opportunities in the print newspapers,” ACCC Chairman Rod Sims said.
“WAN and News appear to be each other’s closest competitors in print and online news in Western Australia. They compete strongly with each other to attract readers and advertisers.”
“The ACCC is seeking to understand whether the competitive tension between WAN and News is a key factor in maintaining quality and diversity of content for readers, or whether the threat of readers shifting to alternatives, particularly alternative online news sites, will competitively constrain WAN after the acquisition,” Mr Sims said.
The ACCC is also seeking to understand whether advertising opportunities on other media platforms, such as radio, television and online, will constrain WAN’s print advertising pricing. In particular, the ACCC is seeking further information about advertisers aiming at an older demographic, as industry participants have suggested that alternative media platforms are not a competitive option for these advertisers.
The ACCC invites further submissions from industry participants in response to the Statement of Issues by 18 August 2016. The ACCC expects to announce its final decision on 15 September 2016.
Background
WAN is wholly-owned by SWM and publishes various print publications and online sites throughout Western Australia. SWM’s national media assets include the Seven Network, Pacific Magazines, and interests in Yahoo!7 and Sky News Australia. In Western Australia, it publishes the print newspapers The West Australian and The Weekend West, and online site thewest.com.au. It also owns a number of other media assets, including radio and community and regional newspapers.
News Corporation is the publisher of various print media and online sites throughout Australia, including The Australian newspaper and online site News.com.au. In Western Australia, News publishes the print newspaper The Sunday Times and online site perthnow.com.au.