Media under threat from its own financial backers

The Media is becoming vulnerable to the financial institutions keeping them afloat, according to a report on local media ownership by AUT University’s Research Centre for Journalism, Media, and Democracy (JMAD)

The New Zealand Media Ownership Report, released today, said the prevalence of commercial and shareholder pressures are increasing in global and regional media corporations.

APN, Fairfax and MediaWorks own over 80% of New Zealand media.

“What was interesting was banks and private equity firms are having more and more influence within media corporations. Ironbridge, for example, is having a major influence in Mediaworks, and Sky TV and APN have bank holdings in their ownership structure,” said media studies associate professor Wayne Hope.

“Three or four years ago media corporations were stand alone firms, so what we call the ‘financialisation’ of media companies is a major trend.”

He said a major implication is the corporate backers are looking for a revenue stream and are not committed to the culture of media organizations, with no inherent interest in journalism or the ethics and principles of the media.

Financers are usually involved for short-term periods which makes long term business planning challenging.

“If a restructuring decision is made by a private equity group it means the role of the journalist becomes fragile.

He said another point of interest was that Fairfax in particular were investing heavily in social media platforms rather than traditional mediums.

Responding to the challenges, New Zealand media companies have continued to economise and digitalise - developments which have led to the closure of a 20 year old weekly business paper, Government loans for a conglomerate with major business holdings and an array of media job losses.

APN, Fairfax and MediaWorks own over 80% of New Zealand media.

“The sphere for public debate is shrinking with fewer voices, fewer journalists and fewer outlets.

“In a situation where we have a concentration of ownership in few hands, profit becomes more important than public interest and the danger is that we get less information.”

The report chronicles key factors that have shaped the media including closure of the NZPA after 130 years, the end of funding of TVNZ7 and TVNZ6, the expansion of Sky to the Internet sphere, and corporates entering the local news markets.

Mr Hope said the government is too closely aligned with the media.

“We all know the dominant media players like to push their own point or view, we’ve seen that made massively clear with Rupert Murdoch.”

 In that situation a handful of powerful media companies also exert undue influence over government.

“The $43 million loan to MediaWorks to cover their licence fee and other expenses is a local example.” 

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