Nine dumps regional merger plan

THE chief executive of Nine Entertainment has abandoned longstanding plans for a mega-merger with a regional TV network.

Nine chief operating officer Simon Kelly, left, with chief executive David Gyngell and chairman David Haslingden.

THE chief executive of Nine Entertainment has abandoned longstanding plans for a mega-merger with a regional TV network, frustrated by the government’s refusal to change media ownership laws.

Speaking to The Australian at Nine’s annual meeting in Sydney yesterday, David Gyngell said he would soon be able to reach regional ­audiences via the internet.

“We think the clock has ticked too far now,” he said of his former plan to do a deal with a regional player.

After failed talks with regional television and radio company Southern Cross Austereo about a $4 billion merger, Nine lobbied hard to get media ownership and concentration laws repealed to enable Australia’s second-placed free-to-air network to undertake a merger.

But Mr Gyngell said the moment had passed, as the National Broadband Network was opening up new avenues for media companies to reach regional audiences previously beyond the grasp of metropolitan TV networks.

“I think technology is going to overtake that ... in five years’ time we will just go around regional television and stream our content into those markets. I think free-to-air regional television is hugely challenged.”

After buying Nine’s affiliate television stations in Perth and Adelaide from Bermuda-based billionaire Bruce Gordon, Mr Gyngell said despite having a first-look option to buy more stations from Mr Gordon’s WIN Corp, he would not exercise it.

“I’m sure Bruce thinks his business is more valuable than I think it is worth, but I am not interested in buying it — so it doesn’t matter any more,” he said.

Mr Gyngell downplayed industry rumours linking the company to Fairfax Media, but opened the door to the newspaper publisher buying a stake in Nine.

Nine has a raft of commercial partnerships with Fairfax including a subscription video-on-­demand joint venture, which will compete with US streaming giant Netflix and Foxtel’s Presto for customers.

“I think people are reading too much into that: there is this whole world of Fairfax and Nine (speculation) going on.

“I don’t see any value at this point of doing any more than (StreamCo),” Mr Gyngell said.

“If they want to buy our shares at a nice price then with my little bit I will vote for it if it’s the right price. I don’t know if they could afford to do that at this stage.”

Mr Gyngell reserved judgment on whether Nine will lobby against pay-TV operator Foxtel buying a stake in free-to-air competitor Ten on antitrust grounds.

“I think Nine and Seven should have the opportunity to do the same thing as Foxtel,” he said.

“I wouldn’t want to buy Channel 10, but I think if Foxtel is allowed to buy it ... all rules should be removed, bar anti-siphoning.”

He said Nine had not bought any radio and outdoor advertising assets because of high valuations.

Nine chief operating officer Simon Kelly said financial year 2015 earnings were on course to be “at least equal” to last year’s $311m, describing the free-to-air television advertising market as “challenging but improving”.