Wellington Scoop

Appeal Court upholds rejection of DomPost/Herald merger

BusinessDesk report by Paul McBeth
The Court of Appeal has upheld the rejection of plans to create a dominant newspaper publisher through the merger of Stuff (whose publications include the DomPost) and NZME (whose publications include the NZ Herald).

The full judgment will be released later this week, but the court has dismissed the media companies’ appeal. Stuff and NZME claimed the Commerce Commission went beyond its mandate by ignoring economic gains from the tie-up for fear of diluting diversity of voices in the media landscape.

The High Court agreed the regulator was entitled to consider lost media plurality in making its decision.

NZME chief executive Michael Boggs said he was disappointed with the Court of Appeal’s ruling and still believes a merger is in the best interests of shareholders and the wider industry.

“NZME will take time to review the full judgment, when released, and consider its options,” he said.

The media group has previously indicated a willingness to take the case to the Supreme Court.

NZX-listed NZME and Stuff, the New Zealand arm of ASX-listed Fairfax Media, applied to amalgamate in 2015, arguing the merged entity would be more able to survive the global competition for local advertising dollars from online search and social media giants such as Google and Facebook. The companies still generate most of their revenue from their print operations but those revenues are declining along with profitability.

Both NZME and Stuff have pursued alternative strategies in the absence of a merger. NZME has rolled out new units aimed at capturing digital advertising and is in the process of developing paid-for premium content. Meanwhile, Stuff has closed or sold a third of its mastheads, largely regional giveaway newspapers and agricultural publications, and is building a suite of utility products such as retail broadband service Stuff Fibre.

Commerce Commission deputy chair Sue Beggs welcomed the latest ruling.

“We are pleased the court has again upheld our decision and look forward to reviewing the judgment,” she said.

Stuff’s parent, Fairfax, is facing similar scrutiny in its planned merger in Australia with Nine Entertainment. The Australian Competition & Consumer Commission said in its request for submissions that its test for ‘substantial lessening of competition’ differs from a public interest test while acknowledging the potential impact on diversity and plurality can be relevant to assessing the level of competition.



  1. Alan Samson, 26. September 2018, 10:32

    The only proper result in a democracy, I would suggest! [via twitter]

  2. Citizen Joe, 26. September 2018, 18:29

    It would be good to have a North Island ‘national’ newspaper with some decent journalistic content. I might even buy it again after giving up when the DomPost shrank, went weird with funny mast-heads and started having a weekly rant by J. Maxwell.