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Are Fairfax Media Limited and Nine Entertainment Co Holdings Ltd eyeing a merger?

Credit: (Mick Baker)rooster

It’s been a while since former Prime Minister Paul Keating famously declared media companies could either be “princes of print” or “queens of screen”.

Back then, in the 1980’s before the internet revolutionised the media landscape, the Labor government’s cross-media ownership regulations sought to prevent companies from gaining a stranglehold on particular markets.

The media regulations spoke of the core of fundamental laws which were aimed at upholding constitutional pillars such as Australia’s implied freedom of political communication and the overarching democratic process.

The rationale was that media monopolies can threaten the diversity of opinions and that’s not good for a democracy.

But times have changed.

The internet has hurt the dominance once enjoyed by Australia’s major media players, which include News Corp (ASX: NWS), Fairfax Media Limited (ASX: FXJ) and Seven West Media Ltd (ASX: SWM).

As a result, the government recently relaxed Australia’s media ownership laws.

Communications Minister Mitch Fifield said the reforms will “strengthen Australian media organisations” and “help ensure their future viability”.

“Measures include the abolition of redundant ownership rules that shackle local media companies and inhibit their ability to achieve the scale necessary to compete with foreign tech giants,” according to the Communications Minister’s website.

The competition watchdog, the ACCC has since softened its stance on its approach to proposed mergers.

Now a series of mergers, some previously considered near impossibilities under the previous regulations, could realistically be achieved.

One of particular interest concerns a possible merger between Fairfax and Nine Entertainment Co Holdings Ltd (ASX: NEC).

And the chances of Prime Media Group Limited (ASX: PRT) being taken over by Seven West have also increased.

As the princes of print and the queens of screen come together we may see the rise of the kings of media.

This means the media sector is certainly going to provide some opportunities and entertainment for investors in the times ahead.

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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