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CMNL Limited & North Dublin Publications Limited Phase One Examination Report 23/04/2018 Table of Contents Table of Contents ...................................................................................................... i 1. Background ...................................................................... 1 The Purchaser: ............................................................................................. 1 The Target: ................................................................................................... 1 Media Sector ............................................................................................................ 1 The Purchaser: ............................................................................................. 3 The Target: ................................................................................................... 3 2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act ......................................................................... 5 Significant Interests ................................................................................................. 5 The Purchaser: ............................................................................................. 6 The Target: ................................................................................................... 6 Impact: ......................................................................................................... 7 Relevant Media Assets .............................................................................................8 The Purchaser: .............................................................................................8 The Target: ................................................................................................... 9 Impact: ......................................................................................................... 9 Ownership and Control .......................................................................................... 10 Relevant Media Assets: .............................................................................. 10 Regulatory Oversight: ................................................................................ 10 Proposed Changes: ..................................................................................... 10 Impact: ....................................................................................................... 10 Market Share ........................................................................................................... 11 The Purchaser: ........................................................................................... 12 The Target: ................................................................................................. 13 Brand & News Reach: ................................................................................ 14 Media Merger – CMNL & NDP; Examination - i - The Views of the Parties ............................................................................. 15 Impact: ....................................................................................................... 15 Governance and Editorial Management ................................................................ 16 Compliance and Ethics .............................................................................. 17 Editorial Ethos ........................................................................................... 17 Impact ........................................................................................................ 17 Content ................................................................................................................... 18 The Purchaser ............................................................................................ 18 The Target .................................................................................................. 19 Impact ........................................................................................................20 Financial ................................................................................................................20 The Purchaser: ...........................................................................................20 The Target: ................................................................................................. 21 The Views of the Parties ............................................................................. 21 Impact: ....................................................................................................... 21 Impact on the Irish Language ................................................................................ 21 Impact: ....................................................................................................... 21 The scale and reach of RTÉ and TG4 ..................................................................... 22 Impact: ....................................................................................................... 22 The Views of the CCPC ........................................................................................... 22 The Views of the Undertakings Involved ............................................................... 22 3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ................................................ 24 4. Conclusion ..................................................................... 28 Media Merger – CMNL & NDP; Examination - ii - 1. Background 1.1 The proposed media merger involves the acquisition of minority ownership of North Dublin Publications Limited (the Target) by CMNL Limited (the Purchaser) through the acquisition of 49.9% of the issued share capital of the Target.1 In this document the Purchaser and the Target are collectively referred to as “the Parties”. 1.2 The proposed transaction is to be implemented pursuant to the terms of a Share Purchase Agreement (SPA) between the Parties, dated 19 December 2017.2 This bid is subject to certain express conditions, including, amongst others, regulatory clearance in the State.3 The Purchaser: 1.3 The Purchaser is an established SME registered in County Meath in the State and is active in the Publishing and Internet Media sectors in the State through the operation of a number of regional newspapers and related news websites.4 The Purchaser is part of the Celtic Media Group.5 The Target: 1.4 The Target is an established SME registered in County Dublin in the State and is active in the Publishing and Internet Media sectors in the State through the operation of a number of “freesheet” newspapers in the Dublin suburban area and related news websites.6 Media Sector 1.5 Media Mergers, as defined in s. 28A of the Competition Act 2002 (as amended) (the Competition Act), refers to those undertakings which “carry on a media business” in the State. A “media business” is defined in the Competition Act as follows: 1 CMNL & NDP, Merger Notification Form, s. 1.1; s. 2.3 2 CMNL & NDP, Share Purchase Agreement 3 Ibid, p. 6 4 CMNL & NDP, Merger Notification Form, s.1.1 5 Ibid 6 Ibid Media Merger – CMNL & NDP; Review - 1 - (a) ‘media business’ means the business (whether all or part of an undertaking’s business) of— (i) the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet, (ii) transmitting, re-transmitting or relaying a broadcasting service, (iii) providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or (iv) making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material; 1.6 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides the following supplementary definition of a “media sector”: (a) ‘media sector’ means one of the following (and ‘media sectors’ means one or more of the following collectively): (i) Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same. (ii) Broadcasting – transmitting, re-transmitting or relaying a broadcast service including radio or television and the production of content for same. (iii) Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs. Media Merger – CMNL & NDP; Review - 2 - 1.7 Furthermore, the Guidelines also note a number of sectors, these being television, radio, print media, internet, [and] other media interests, on the basis of which cross-media interests can be considered. 1.8 The Guidelines provide a working method of grouping media business, as defined in the Competition Act, in order to facilitate the examination of notified media mergers. The guidance provided by the Guidelines in this area is not exhaustive and does not preclude the examination of sub- sectors of the media sectors identified or other relevant groupings of media businesses. The Purchaser: 1.9 The Purchaser is active in the Publishing sector in the State through the publication of newspapers or periodicals consisting