Seven West deal tests media diversity

The Australian Communications and Media Authority will closely examine the number of media voices in Western Australia.

Seven West media boss Kerry Stokes pictured with CEO James Warburton in Sydney. Picture: Nikki Short

The Australian Communications and Media Authority will closely examine the number of media voices in Western Australia as it reviews the proposed merger ­between Seven West Media and regional broadcaster Prime.

At Senate estimates on Tuesday afternoon, ACMA chair Nerida O’Loughlin said the regulator would use two tests to examine the transaction, one of media ­diversity and another regarding a “temporary breach of control”.

“Our role is to look at two main issues. Firstly, around transactions that result in what is called an ‘unacceptable media ­diversity situation (UMDS)’, which is usually called the voices test,” Ms O’Loughlin said.

According to the ACMA, an unacceptable media diversity situation occurs when there are fewer than five voices in a metropolitan area, and fewer than four in regional areas.

“The second one we’ll be looking is the temporary breach of a control rule — and that is what is colloquially called … the two-to-a-market rule, so not being able to have two licensees in a particular market,” she added.

Ms O’Loughlin’s comments come four days after Seven West Media announced the merger, which chief executive James Warburton said would create the largest news footprint in Australian broadcasting. Seven West Media’s deal values Prime at $65m, and is expected to generate $11m in cost savings.

At the same time, Seven will sell its WA regional radio business, RedWave, to Southern Cross Austereo for $28m.

Seven West Media has made a number of transactions in WA over the last three years.

In 2016, it acquired News Corp’s Sunday Times and online site PerthNow, while in May this year it announced it had acquired the remaining 50.1 per cent of share in its Community News joint venture with News Corp.

News Corp is publisher of The Australian.

Community News publishes 12 newspaper titles covering the Perth metro and outer suburban areas including the Stirling Times, Canning Times and Mandurah Coastal Times.

WA senator Sue Lines raised concerns at Senate estimates that there was already a reduction in media voices in the west.

Ms O’Loughlin said she would find out the diversity situation for WA and provide it to the Environment and Communications Legislation Committee at a later date.

“It depends on which licence area you are looking at, senator, we can take that on notice … We could give you that information on notice.”