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News Corp Australia, Nine strike Facebook content deals

By Zoe Samios
Updated

Social media giant Facebook has struck content deals with Australia’s two largest media companies — Rupert Murdoch’s News Corp and Nine Entertainment Co — in a major breakthrough after weeks of tense negotiations following the introduction of media bargaining laws.

News Corp Australia announced on Tuesday it had signed a multimillion-dollar deal with Facebook for use of news articles from publications such as The Australian, The Daily Telegraph and the Herald Sun and videos from Sky News Australia.

Robert Thomson said the money from Facebook was meaningful.

Robert Thomson said the money from Facebook was meaningful.Credit: Bloomberg

Nine, the owner of The Sydney Morning Herald and The Age, has also signed a letter of intent with the tech giant for use of its news articles, according to industry sources who could not speak publicly because the negotiations are confidential.

The agreements follow months of difficult negotiations between media companies and the $US780 billion (AU$1 trillion) social media giant and were struck after it changed previously non-negotiable “poison pill” clauses in contracts that would allow the tech giant to walk away if it was required to comply with the media bargaining laws.

Industry sources familiar with the deal said News Corp will be paid for the use of articles in Facebook’s soon-to-launch ‘News’ product and Facebook video product, Facebook Watch. It follows a global deal reached between News Corp and Facebook in October 2019.

News Corp chief executive Robert Thomson said the agreement would have a “meaningful impact” on its Australian businesses.

“[Facebook CEO] Mark Zuckerberg and his team deserve credit for their role in helping to fashion a future for journalism, which has been under extreme duress for more than a decade,” Mr Thomson said. “Rupert and Lachlan Murdoch led a global debate while others in our industry were silent or supine as digital dysfunctionality threatened to turn journalism into a mendicant order. This digital denouement has been more than a decade in the making.”

News Corp’s ASX-listed shares closed at $31.86 on Tuesday while Nine shares closed flat at $2.99.

News Corp Australia executive chairman Michael Miller said the agreement was in addition to existing arrangements with Facebook in an internal note to staff.

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“The events of the past month have reinforced to us and to Facebook the value our news, storytelling and brands bring to the Facebook platform,” Mr Miller said.

Andrew Hunter, head of news partnerships at Facebook Australia and New Zealand, said the agreements gave users access to premium content and video from News Corp’s publications.

Industry sources familiar with Facebook’s negotiations with Nine have indicated a letter of intent was signed between the two companies. “We continue to have constructive and fruitful discussions with Facebook. When we have anything to announce, we will do so to the ASX as is appropriate,” a Nine spokesperson said.

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The two agreements are in addition to deals signed with media companies including Seven West Media, Solstice Media, publisher of The New Daily and Crikey owner Private Media. The agreements with Nine and News Corp are expected to be more lucrative than deals signed previously.

Other outlets such as Guardian Australia and the ABC are still negotiating how much money they should receive, according to people familiar with the confidential discussions.

Facebook has been trying to strike commercial deals with large media outlets for use of news articles for several weeks to avoid being punished under new media bargaining laws.

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News Corp’s announcement comes almost a month after the tech giant pulled news articles from its website in a stand-off with the federal government over proposed media bargaining laws.

It restored them after securing 11th-hour amendments to the code, which became law at the end of February and sets out a framework that forces Google and Facebook to broker commercial deals with media companies for the value they gain from having news content on their platforms.

Seven, Nine, Guardian Australia and News Corp all signed letters of intent with the Google last month. Legally binding contracts were expected to be signed after 30-day period but could now be delayed due to the complexity of the deals.

Facebook is in a separate fight with the competition regulator over privacy.

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Original URL: https://www.watoday.com.au/link/follow-20170101-p57b1f