West Australian Newspapers Holdings Limited and Publishing and Broadcasting Limited - proposed acquisition of Hoyts Cinemas


Proposed Joint Venture by West Australian Newspapers Holdings Limited and Publishing and Broadcasting Limited to each acquire a 50% share of Hoyts Cinemas.

Market definition

The relevant markets considered were regional Western Australian markets for:
1. Film Exhibition;
2. Film Distribution; and
3. Media advertising which:
a. at its broadest may incorporate television, radio, newspaper and magazine space, cinema, outdoor and direct marketing, and 'new media' such as the Internet; and
b. at its narrowest may include only cinema advertising.

Competition analysis

The Commission considered that the proposed joint venture is unlikely to result in a substantial lessening of competition in any of the relevant markets due to the following reasons:

* Neither WAN nor PBL have any existing interests in the markets for film exhibition or film distribution, hence the transaction merely involves a change of ownership which does not alter market concentration levels or competition dynamics;

* In terms of a broad market definition for media advertising:
- Cinema advertising makes up a very small proportion of total spending on media advertising, therefore any increase in market share of WAN would only involve a small accretion in market share which is unlikely to impact to any significant extent on the state of competition in the market;
- WAN and Hoyts are likely to be competitively constrained by the many media alternatives for advertising available to advertisers; and
- The countervailing power possessed by large advertisers in Hoyts cinemas would likely act as a constraint on WAN and PBL..

* In terms of a narrow market definition for cinema advertising, market concentration levels will not be altered and hence the joint venture is unlikely to substantially lessen competition.