Cross Media Ownership restriction in European Countries and New Zealand

Three European countries – France, Italy, and Germany – have developed specific legislation on cross-media ownership[1]. As per French legislation, cross-media mergers are regulated by Law 86-1067 (Loi Léotard) which was revised on 10 July 2004[2]. According to article 41.1, “at national level, an individual or legal entity can be involved only in two of the following areas: one or more television licences for analogue or digital terrestrial channels reaching four million residents; one or more terrestrial radio services reaching 30 million people; daily papers that have a market share of more than 20 percent of the national circulation”.

In the Italian law framework, where cross-media mergers are currently regulated by law n.122, 3 May 2004 (Legge Gasparri)[3]. This law regulates the media sector as an ‘integrated communications market’ (or SIC, Sistema Integrato delle Comunicazioni) which includes a broad range of industries: television, press, radio, internet, in addition to publishing, cinema and advertising. Cross-media ownership limits do not allow any owner to achieve more than 20 percent of the share of revenues within the entire SIC.

As per the German legislation, under §26 of the German Broadcasting Treaty, assumes that a broadcaster would reach a dominant position “if it achieves a 30 percent audience share, or an audience share of 25 percent if it concurrently holds a dominant position in a related, media-relevant market or if an overall assessment of its activities in television and in related media-relevant markets suggests that the influence of such activities is equivalent to that of a company with a 30 percent audience share” (Just, 2009: 11). A particular weighting system has been developed by the KEK, the German Communication Authority, in order to determine the equivalent share of a media company.

A law, enacted in 1986 and the subsequent establishment of the Conseil Superieur de l’Audiovisuel (CSA) in 1989 regulates the governance of the communications industry in France.  The CSA also manages issues of media ownership and concentration. While the Competition authorities are obliged to consult with the CSA on mergers and acquisitions in media matters it is the sole responsibility of the CSA to monitor mergers and cross media ownership. Shareholders have the obligation to report to the CSA when their holding exceeds 10% so the CSA can effectively monitor share capital ownership.

Specific ownership restrictions applicable to the media sector
French regulations provide for media ownership restrictions in order to preserve media pluralism and competition. In particular, any single individual or legal entity cannot hold, directly or indirectly, more than 49 per cent of the capital or the voting rights of a company that has an authorisation to provide a national terrestrial television service where the average audience for television services (either digital or analogue) exceeds 8 per cent. In addition, any single individual or legal entity that already holds a national terrestrial television service where the average audience for this service exceeds 8 per cent may not, directly or indirectly, hold more than 33 per cent of the capital or voting rights of a company that has an authorisation to provide a local terrestrial television service.[4] Further, unless otherwise agreed in international agreements to which France is a party, any foreign national may not acquire shares of capital of a company holding a licence for a radio or television service in France and that uses radio-electrical frequencies if this acquisition has the effect of raising (directly or indirectly) the share of capital or voting rights owned by foreign nationals to more than 20 per cent. This provision does not apply to publishers with less than 80 per cent capital or voting rights being held by public radio broadcasters belonging to Council of Europe Member States, or with less than 20 per cent being owned by one of the public companies mentioned at Article  44 of the Law of 30 September 1986[5]Also, Any modification to the capital of companies authorised by the CSA to broadcast TV or radio services on an Hertz-based frequency is subject to the approval of the CSA[6]

Ownership Television and Radio: There are three limits placed on television ownership; capital share, number of licenses and audience share, and participation in more companies in the same sector. This is regulated to apply as follows: an individual person may not own more than 49% of a national TV channel or 33% of a local channel if the average annual audience is greater than 2.5% of the total audience. If a person holds two licenses, they cannot own more than 15% of the second license and if they own three then they cannot own more than 5% of the third license. A person may not own more than one analogue license or seven digital licenses. No more than two Satellite licenses are permitted. The regulations focus on not concentrating ownership in an individual’s hands but shared ownership of companies seems to be permitted.
There is a ban on owning two regional broadcast TV licenses (analogue and digital) or more than one license if the audience area is greater than 6 million.
For radio, an entity may not control one or more stations or network(s) if the aggregate audience exceeds 150 million.

Newspaper ownership: Companies are not allowed to acquire a new newspaper if the acquisition boosts their total daily circulation over 30%.

Cross Ownership: An owner may not be involved in more than two of the following at the national level:
  • TV audience area of 4 million people
  • Radio audience area of 30 million people
  • Cable audience area of 6 million people
  • Exceeds 20% share of the national circulation of daily newspapers
  • Further restrictions are noted at the local level:
    • Owning a national or local TV license for the area
    • Owning one or more radio licenses with cumulative audiences of more than 10% for that area
    • Owning a cable network for the area
    • Editorial or other control of daily newspapers in the area
Foreign Investment: Non-EU investment is limited to a 20% share of the capital of a daily newspaper, or of terrestrial broadcasting (radio and TV) in the French language. Satellite and Cable foreign ownership is permitted.

Restrictions for Political parties and Organizations: There are no provisions.

New Zealand
Simply put there are no foreign ownership rules and there are no cross media restrictions in New Zealand. Beginning in the 1980s, New Zealand deregulated the entire communications sector (along with a great deal of all their industry and economy). 

New Zealand has a small population (4 million people) in what can only be described as a geographically protected market. The measures taken by the New Zealand government in the eighties and nineties, in many ways, have created truly an isolated market experiment. Most media owners of print and broadcasting companies appear pleased with the circumstances and fiercely defend the system. Predictably, cultural nationalists, academics, and journalists are not so enthusiastic and are encouraging change to a more regulated environment to create better local news and cultural expression.

In 2003 the Minister of Broadcasting Steve Maharey said: “For some years from the late 1980s and 1990s, government in New Zealand moved away from a real appreciation of broadcasting as a cultural educative force. In its embracing of market driven policies Government distanced itself from what I believe is its responsibility to ensure that New Zealanders have access to a genuinely indigenous broadcasting system…….” The government did go on in November of last year to announce funding for TVNZ to offer two distinct public service digital channels (a news and sports offering to begin in 2007 and a kids channel to begin in 2008, both commercial free with $78 million in funding over 6 years) as part of their digital transition offering. While the Government has attempted to address the issue of concentration and foreign ownership by these initiatives, they are not structural in nature and the communications sector in New Zealand remains foreign owned and highly concentrated. For example:
  1. Daily newspapers are 81% foreign owned and most readers are served by one daily newspaper in their market. The foreign ownership comes from two international companies and the remainder are New Zealand owned
  2. Television comprises six networks, two of which are controlled by the public broadcaster TVNZ and enjoy 49% of audience share. Media Works has two channels (19% audience share) and is owned by CanWest (currently in process of selling) and Prime TV (5% audience share), which is owned by Sky Television (comprised of Rupert Murdoch and Australian interests). The final network is the State funded aboriginal Channel, Maori TV. There is some regional TV and community based stations but they have insignificant commercial or audience value.
  3. Sky Television Network owns Pay TV in New Zealand and is a monopoly including terrestrial and satellite services with 84 TV channels, radio and audio channels. Rupert Murdoch owns Sky which enjoys a 23% market share.
  4. Radio is comprised of two large commercial networks; an Australian media company and Clear Channel (46% audience share) own The Radio Network with 118 stations and 8 brands. Radio Works has six network brands, operates on 140 frequencies throughout New Zealand, is principally owned by CanWest (70% with minority shareholders) and enjoys a large audience share. Radio New Zealand is a public broadcaster with two networks and modest audience share. There are some community based radio broadcasters.
New Zealand has a Broadcast Standards Authority (BSA) that does administer content standards for radio and television based on codes of broadcast standards and usually involves a process triggered by complaints. However, in terms of indigenous content vs. foreign content there is no requirement. The BSA is starting to touch some of these issues with their mandated research role and two recent papers; The Future for Media Regulation in NZ: Is There One and Issues for Broadcast Content Regulation. These studies indicate an interest in a discussion at the very least.
 As of 2011, the vast majority of NZ media (TV, radio, print) are in the hands of companies based in Australia, the UK, Ireland and USA. NZ could well contend for the right to be crowned “the world’s least regulated broadcasting environment” (Comrie & Fountaine, 2006).[7]

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