Seven West’s mag blow ahead of Prime vote

Seven West Media has copped a fresh blow ahead of a likely unsuccessful takeover tilt at Prime Media, with the competition watchdog raising concerns over the broadcaster’s $40 million sale of Pacific Magazines to rival Bauer Media.

The ACCC on Thursday raised preliminary concerns over the transaction, which would result in German-based Bauer adding Pacific magazine titles New Idea, Who, Marie Claire, Better Homes and Gardens and That’s Life to a stable that already includes Woman’s Day, Woman’s Weekly, NW, Harper’s Bazaar and Take 5.

ACCC chair Rod Sims noted that while the magazine market is in decline, competition still has a role to play.

“Pacific Magazines and Bauer are the only magazine publishers in certain categories, and their titles appear to compete head-to-head on content and cover price,” Mr Sims said in a release.

“If Bauer bought Pacific Magazines, Bauer would remove its closest competitor in certain segments. Our preliminary view is that this would allow Bauer to reduce the effort put into content production and the range of content, or to increase prices.”

Seven West in reply accused the ACCC of taking “an overly narrow view” of the competitive dynamics and constraints at play for magazine publishers, and said the competitive constraints from digital and social media platforms had not been properly considered.

“Advertising spend on consumer magazines represents only two per cent of total advertising spend in Australia, whereas internet advertising spend accounts for more than 46 per cent of total advertising spend in Australia,” Seven West chief executive James Warburton said.

“At a time when the ACCC itself is looking at the impact of digital platforms on traditional media businesses and in the face of proposed government reforms to redress the imbalance between traditional media businesses and the dominant digital platforms, the concerns that have been expressed seem misplaced.”

Submissions on the Pacific-Bauer deal – which includes a cash consideration of $40 million and $6.6 million worth of advertising for Seven West with Bauer – will be accepted up until February 14 with a final decision to be made on April 2.

The regulator’s statement comes ahead of Seven’s likely doomed $64 million takeover bid for Prime.

Two major Prime shareholders – Australian Community Media chairman Antony Catalano and WIN TV owner Bruce Gordon – are set to oppose the deal at a shareholder vote on Thursday.