Seven West Media takeover of the The Sunday Times and PerthNow gets ACCC approval

Following an extensive review process commenced in May, The Australian Competition and Consumer Commission has given its approval for Seven West Media to acquire The Sunday Times and PerthNow from News Corp Australia.

A statement released today said:

The Australian Competition and Consumer Commission will not oppose the proposed acquisition of The Sunday Times and perthnow.com.au from News Corporation (ASX:NWS) (News) by Seven West Media (ASX: SWM).

“The ACCC received a significant amount of feedback about diversity and quality of news from consumers in Western Australia. We also listened carefully to concerns raised by businesses who advertise in West Australian newspapers,” ACCC Chairman Rod Sims said.

“Following an extensive review, the ACCC has reached the view that the proposed acquisition is, on balance, not likely to substantially lessen competition for either consumers or advertisers.”

“On the consumer side, the large decline in print newspaper readership formed a major part of our analysis. Many consumers in Western Australia are now getting their news online or from other sources,” Mr Sims said.

“With regards to SWM’s ownership of thewest.com.au and the proposed acquisition of perthnow.com.au, we gave consideration to other online news alternatives for West Australians, including Fairfax’s WAtoday.com.au and ABC News’ dedicated Western Australian website.”

Although some advertisers raised concerns about the loss of competition for advertising opportunities, most acknowledged that print advertising was of declining importance and identified other advertising options they could switch to if WAN attempted to increase rates.

“Advertising expenditure in print newspapers in Perth is in steep decline. Most of the advertisers we spoke to after publishing the Statement of Issues are spending less on print newspapers than a few years ago and are finding alternative ways of reaching target audiences, including via digital media,” Mr Sims said.

Further information is available on the ACCC’s public register: Seven West Media Limited – proposed acquisition of The Sunday Times publication and website from News Limited.

Seven West Media has released a statement welcoming the the decision:

Commenting on the ACCC green light, the Chief Executive Officer and Managing Director of Seven West Media, Tim Worner, said: “We are genuinely excited about this acquisition. We will have great assets which undoubtedly build on our commitment to delivering the very best news coverage and content to the people of Western Australia.

“The Sunday Times and Perth Now are great brands. There is a strong bond between them and the people of Western Australia. The Sunday Times has a unique heritage and we will nurture both The Sunday Times and Perth Now for the benefit of all our readers.

“We wish to acknowledge the great work of News Corporation in growing and building these businesses and are mindful that it was Rupert Murdoch’s second acquisition and dear to his heart. We will be worthy custodians.

“Seven West Media is the natural home of these assets as we further build their publishing and digital presence. We look forward to finalising the agreement and ensuring a positive and growing future for The Sunday Times and Perth Now as they continue to be part of the fabric of Western Australia.

“We are about building our media business and ensuring we continue to deliver strong local and relevant content to our audiences. The underlying imperative in this agreement was to place our company in a stronger position to compete with the increasing presence of global content and platform businesses in our market. For us, this is a once in a company lifetime

opportunity and that is the way we are going to approach it,” Mr Worner said.

Seven West Media expects the investment to be earnings accretive in its first year and to increase shareholder value for the group.

Commenting, the Chief Executive Officer of Seven West Media (WA), Chris Wharton, said: “The acquisition of Perth Now and The Sunday Times is a positive for our audiences and our company. Our integration of Channel Seven Perth, The West and our online businesses into the one media centre is delivering significant results. Perth Now and The Sunday Times

deliver audiences complementary to those we are delivering with The West. This agreement will expand our audiences and further enhance the presence of Perth Now and The Sunday Times in our market.”

As part of the agreement, Seven West Media and News Corporation will also build on a news content sharing agreement for The West Australian with News’ daily brands in Adelaide, Brisbane, Melbourne and Sydney. Seven West Media and News Corporation are also joint venture partners in the Community Newspaper Group in Western Australia.

The agreement delivers significant opportunities for Seven West Media’s development in the Western Australian market with Perth Now joining the company’s existing digital platforms. The acquisition will see the company expanding its publishing and printing from six days to seven days a week and will deliver improvements in scale benefits and print cost synergies for Seven West Media’s businesses in Western Australia.

Adam Marshall, Managing Director of media agency Carat in WA , said it was a positive and welcome decision.

“I think this is great news. We live in a global media market so having strong local champions is critical to our industry and our clients. The move will protect WA jobs and provide credible competition to players such as Google and Facebook. I am delighted and relieved by the news.”

Clive Bingwa, MD of Initiative echoed Marshall’s view.

“It’s a good thing that there is positive investment locally. We trade in audience and engagement and as long as those things continue to be delivered and priced correctly then it should be a good story for all of us in market!”