Nine’s takeover of Fairfax will “revolutionise advertising” creating a “marketing platform” benefiting from the combined scale and access to data across the two companies, according to a spokesperson the acquiring broadcaster.
This morning Nine announced its intention to acquire Fairfax, representing a significant consolidation in the market, assuming the deal, which has the support of both boards, gets by regulators.
The new media group will include Nine’s free-to-air television network, Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media.
“We will be the leading advertising platform and marketer in the business,” said a spokesperson for Nine during an investor call this morning.
“This is going to revolutionise the way we do advertising in market because — what we have that our new competitors, the Googles and the Facebooks of the world don’t have — is quality premium, Australian content that audiences want to engage with.”
“From an advertising perspective when we can offer a solution to advertisers that gives them not only access to that quality content but in an environment where their data is enhanced, the proposition for advertiser’s is greatly advantaged.”
According to the executive, a move to targeted advertising across its properties, means Nine can offer “advertisers a better, more informed advertising solution then they have bought from us in the past.”
The combined company will be able to offer advertising solutions across television, digital, on-demand, radio and print.
“Our ability to offer solutions to advertisers and agency clients which provide more value, more integration… as a marketing platform, rather than just advertising, underpinned by data; the significance of that should not be understated.”
The deal is the first example of Australian media consolidation following the change to media ownership laws last year, which scrapped the two out of three rule.
In the US, media players are also bulking up, with AT&T acquiring Time Warner and Disney buying 21st Century Fox.
The companies said the deal will deliver $50 million cost synergies, but Nine has indicated the deal isn’t about making cuts to content.
“This deal is not about cost, this deal is all about investment in content for the future … The $50 million number – most of that will come from functions outside the core content creation function – duplication of services,” the CEO of Nine said.
The ABC reports, Fairfax’s shares are up 12 per cent higher to 86 cents shortly after 11:00 am while Nine’s share price dropped 7.5 per cent $2.33.