Merger raises questions of media diversity

Unions are concerned about the "dangerous concentration of media" Keystone

The news that Zurich press group Tamedia is to take over the Bernese Espace Media group has sent ripples through the normally calm Swiss media landscape.

For unions and certain observers the merger, which is part of an ongoing consolidation in the Swiss media sector, raises concerns about plurality of opinion and independence.

Tamedia, the owner of the Tages-Anzeiger newspaper and the free newspaper 20 Minuten, said on Thursday it would pay SFr205 million ($166.9 million) for 80 per cent of Espace media, which owns the Berner Zeitung and the Bund newspapers.

The move, which still requires approval from the Swiss Competition Commission, means that the Zurich-based group would leapfrog Edipresse to become Switzerland’s second largest publishing company behind Ringier.

The merger is driven by the need to capitalise on a shift in usage and advertising to the internet, the groups said in a statement.

“The aim is to boost innovation activities and quality as well as to jointly launch new media projects in the areas of print, online and e-media,” it stated.

Roger Blum, professor for Communication and Media Science at Bern University, had mixed feelings about the news.

“It’s an inevitable development, which represents a certain danger for plurality of opinion, but it’s not bad for the quality of print media,” he told swissinfo.

While he was happy that the groups remain in Swiss hands, as “Swiss media has a dedication to Swiss democracy and related questions”, Blum was worried about the drop in the number of media organisations in Switzerland, which “can only result in less opinion, comment and analysis”.

Communication Minister Moritz Leuenberger told Swiss radio he felt the merger did not represent a danger.

“There are sufficient media organisations to guarantee [plurality of opinion]. But strong press groups can also ensure good quality journalism,” he commented.

Reactions

“Originally a Zurich company, with this deal Tamedia becomes a national press group,” said Martin Kall, Tamedia’s chief executive. “We want to do more, together”.

While shares rose on the news of the deal, Swiss media unions and associations were sceptical about the development.

“It’s questionable whether independent newspapers can still be produced in Bern,” said Urs Thalmann, secretary-general of the Impressum journalists’ association. “Every new consolidation leads to reduced competition and less pressure on individual media organisations to stand on their own and work independently.”

The media union Comedia said it was alarmed about the “dangerous concentration of media” and the impact of the merger on jobs.

It called on Tamedia to guarantee the diversity of job locations and media, and especially independence: “Otherwise the monopoly situation will just get bigger – already we read the same things everywhere”.

But the consolidation trend looks unlikely to slow down.

“In the future there will be three big companies in the German part of the country, Ringier, Tamedia and NZZ, and one in French-speaking region, and smaller companies will cooperate with them,” said Blum.

Sell-offs

The Espace Media group, whose origins date back to 1888, and Tamedia, which emerged from the Tages-Anzeiger newspaper founded in 1893, have been affiliated for many years. Since 1990 Tamedia has held a 49 per cent stake in the daily Berner Zeitung, which itself holds a 15 per cent stake in the Sunday newspaper SonntagsZeitung.

Cooperation was expected to be increased following the acquisition by the Berner Zeitung of a 17.5 per cent stake in the free newspaper 20 Minuten.

As part of the cash-and-shares deal the Zurich-based media group would also issue 600,000 Tamedia shares as part of a capital increase, it said in a statement.

Under Switzerland’s new broadcasting legislation, which limits the number of private radio licences to two per provider, Tamedia and Espace are required to sell one private radio station each.

swissinfo, Simon Bradley

In brief

Tamedia, a leading Swiss media group based in Zurich, operates within four business sectors: newspapers, magazines, electronic media (radio, TV, internet) as well as printing and logistics.

It owns 14 newspapers and four magazines, including the daily newspaper Tages-Anzeiger, the Sunday newspaper SonntagsZeitung, the free newspapers 20 Minuten/20 Minutes and the weekly magazine Facts. The group also owns the television station TeleZüri and two radio stations, Radio 24 and Radio Basilisk.

Espace Media group is based in Bern and owns eight newspapers, including the daily newspapers Berner Zeitung and Bund and three magazines. The group also owns the television station TeleBärn and two radio stations, Capital FM and Canal 3.

Key facts

Tamedia
Turnover SFr723.6 million (+11%)
Net profit SFr98.4 million (+23%)

Espace Media Groupe
Sales: SFr250 million(-4.5%)
Net profit: SFr17.6 million (-6.4%)

Swiss media

The Swiss media scene is dominated by only a few companies, in particular Ringier, Tamedia, Edipresse and NZZ.

Following the latest merger, Tamedia will become Switzerland’s second largest publishing company (consolidated turnover SFr971 million) behind Ringier (SFr1.34 billion) and ahead of Edipresse (SFr887 million)

In terms of Swiss media groups, Tamedia is now ranked in fourth position behind PUBLIGroupe, SRG and Ringier.

In 2006 the most popular newspapers in Switzerland were 20 Minuten (1.04 million readers), Blick (727,000), Tages-Anzeiger (576,000), Berner Zeitung (403,000), Mittellandzeitung (391,000), Le Matin (363,000), Neue Zürcher Zeitung (330,000), Neue Luzerner Zeitung (297,000), Die Südostschweiz (255,000) and 24 Heures (273,000).