Bauer Media has, as most expected, been given Commerce Commission approval to proceed with its purchase of APN magazine titles the NZ Listener, NZ Woman’s Weekly, Simply You, Simply You Living and Creme.
APN will continue to publish the Pacific Magazines titles New Idea, That's Life and Girlfriend, which it has published under license since 2010.
Bauer chief executive Paul Dykzeul says he was "always pretty confident" it would be given approval.
"We put together a pretty compelling case and the Commerce Commission took a long and hard look at it. They didn’t come back to us with any particular issues. So they must have felt our argument was a pretty compelling one. We know they spoke extensively to other media companies and competitors. They also spoke to a lot of media agencies. So there were a wide range of people spoken to and from what we were hearing their investigation was very thorough."
The main thrust of its argument, he says, was that there is a lot of competition out there (check out its submission here), not just from other magazine companies, but also from newspaper inserted magazines, which he says are an increasingly big threat, and other media owners.
The other side of it was from an advertising perspective, he says, but “everyone buys on multiple platforms these days and magazines are just one platform".
He says the Commerce Commission hasn’t had to address many big media issues in recent times, aside from a recent investigation into Sky. And "because they’re not operating in this industry, the fact that each media channel doesn’t operate within its own orbit and we have to scrap it out with everyone was one of the areas that they found a little bit hard to understand".
He says it could have taken the risk and just gone and done it (it’s thought APN didn’t see the need for Commerce Commission approval), but Dykzeul says the German company is "very respectful of the laws in the countries in which they operate in", so it wanted to go through the appropriate channels first.
He is unaware if there were any submissions against the deal, as they’re not told, but he hasn’t come home to any horse heads on his bed yet.
“Although I’m sure there are a few who would like to give me one,” he says.
As for the new structure, he says it is still working through the finer details, but it has done a lot of work, both in terms of staff and the overall business strategy.
He says the team will grow by around 45 as a result of the purchase (it’s thought there were around 90 staff at NZ Mags, although some will obviously be sticking around to work on the magazines it still publishes). But, as there’s obviously some duplication of roles between the two companies, "it was always about getting the best people".
“We interviewed people and in one or two cases we’ve chosen people from APN [over Bauer staff]. But it would be fair to say that in the majority of cases, Bauer people have retained those roles.”
Each of the teams coming across from NZ Magazines will have Bauer people included in them, he says.
“For example, the New Zealand’s Women’s Weekly editor [Louise Wright] isn’t coming across so we’ll put in one of our own editors. It’s a very careful plan. We’re not in a position to announce who all the people are at this stage as we were expecting [the decision] to take take another month, but we’re well advanced in terms of who and what and how we’re going to do everything. We’ve done a lot of work in terms of structure and how we’re going to sell the titles. Obviously, we had a particular strategy for the weeklies, but that's changed as it's now a much bigger business.”
Overall, he believes this is a fantastic result for the magazine industry—and for Bauer.
“I’ve been pursuing this for a very long time and I wouldn’t have done that if I didn’t think it was worth it. These are terrific magazines, but they need a bit of care and attention. We’re a pretty successful publishing company and these are great titles for us to have and it will strengthen our online offer enormously. The Listener is an iconic brand and we’ll learn a lot from how they do things. So it’s great for our business. I don’t think it matters what media business you’re in, if you’re not looking to grow and develop other opportunities, then you shouldn’t be in business and you’ll struggle in the long term.”
As a private company, he says Bauer doesn’t discuss the details of its deals.
Dykzeul has been a fairly vocal critic of APN in the past, and of the problems associated with a business primarily focused on newspapers also having a magazine division.
“We’ve been pretty fierce competitors over the years [particularly when it comes to the big weeklies Woman's Day and NZ Woman's Weekly] and that competitive streak will continue because they’re continuing to publish the Pacific Mags titles. And we’ll continue to compete with them with their [newspaper inserted magazines]."
Bauer, a Hamburg-based company with around 11,000 staff around the world, bought the company in September 2012 for what Fairfax says was an estimated $600 million and Dykzeul says "it’s a great vote of confidence in the New Zealand business" that it is willing to invest more in these titles so soon after the purchase—and after investing significantly in shifting the company to a new office in the City Works Depot.
“They’re very happy with the way the New Zealand business is going and they want to grow that business.”
In his role as deputy chair of the Magazine Publisher's Association, Dykzeul has taken a lead role in promoting the benefits of magazines and dealing with some common misconceptions, to the point where some people think he’s “a bit of a show pony” in that regard. But that confidence is paying off, he says.
“I really believe in the business and that it has something unique to offer. And it behoves us to tell people about it. I think the work [MPA chair] John Baker has done, with my assistance, has been fantastic. That hasn’t happened in Australia, and they’re paying the price.”
Here's the Commerce Commission release:
The Commerce Commission has cleared Bauer Media Group (NZ) LP (Bauer) to acquire all of the assets used by APN Specialist Publications NZ Limited (APNSP) in the publication of the New Zealand editions of the following magazines: New Zealand Woman’s Weekly; Simply You; Simply You Living; New Zealand Listener; and Crème.
The Commission considered the impact of the proposed acquisition on the production and supply of magazines, including the content of magazines and the sale of advertising.
The Commission is satisfied that the proposed acquisition will not have, or would not be likely to have, the effect of substantially lessening competition in the supply of current affairs magazines, mass market weekly women’s magazines, women’s interest magazines and magazine advertising.
“The merged firm would continue to face competition from the suppliers of other magazine titles and alternative platforms, such as television, newspapers and the internet,” said Commerce Commission Chairman Dr Mark Berry.
A public version of the written reasons for the decision will be available shortly on the Commission’s Clearances Register.
Bauer is part of an international magazine publishing group which operates in 16 countries. In New Zealand, Bauer publishes a number of magazine titles, including New Zealand Woman’s Day, Australian Women’s Weekly (New Zealand edition), NEXT, Metro, North & South and Fashion Quarterly. It also imports a number of titles from Australia, including Cosmopolitan, Harper’s Bazaar and Australian House and Garden.
APNSP, which is ultimately 100% owned by APN News & Media Limited, currently publishes eight magazine titles, including New Zealand Woman’s Weekly and New Zealand Listener. The company will continue post-acquisition to publish the New Zealand editions of three magazine titles (New Idea, That’s Life! and Girlfriend).