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media reform: the fallout begins « Previous | |Next »
October 19, 2006

So the changes in the media industry are taking place even before the media legislation, which overturns restrictions on cross-media and foreign ownership rules legislation, becomes law. Securing Australian media assets is the new game. It looks as if the pre-emptive manoeuvring by the established media groups is a precursor to real change in the structure and ownership of the sector.

Publishing and Broadcasting Ltd (PBL) is selling half its media assets, including the Nine Network, to a private equity group, CVC Capital Partners. Packer will retain management control of the new vehicle, PBL Media, while pocketing the equivalent of $5.6billion. It is understood that money will go principally towards expanding the family's gambling empire if only because the return on capital invested in casinos is higher than the old media, and investors rate gaming companies at higher price-earnings levels than media.

Bill Leak

WA businessman and majority shareholder in the Seven Network Kerry Stokes spent close to $200million buying some 15 per cent of West Australian Newspapers, publishers of WA's only metropolitan daily paper. Wasn't diversity the justification for the changes to the media rules some years back not entrenching the power of the existing media barons? Won't Stokes move to integrate the paper with his Seven news service in Perth, WA? Didn't Helen Coonan also say that the government’s media ownership laws would not lead to a wave of takeovers?

The Government's proposition that the new media laws will promote greater diversity and there won't be a wave of consolidation is looking untenable. Probably the real intention of the legislation is to allow Australian media groups to develop into globally competitive firms. Since Australia's media and marketing industries need to go global if they are to be really successful Helen Coonan helps them to achieve this by lessening any competitive threats and protecting the existing free-to-air TV regime. That means facilitating the greater consolidation of the industry. Restoring the integrity of the Fourth Estate, consumers or the democratic health of liberal democracy are of little concern in these reforms.

Update: 20 October
Now Rupert Murdoch has confirmed his $360 million, or 7.5%, purchase of John Fairfax Holdings, which is described as a "friendly" investment. Murdoch's acquisition has changed the Australian media landscape further: it now looks as if Fairfax will be bought, broken up and sold. The News raid on Fairfax was predictable.since Murdoch was never going to sit passively on the sidelines while other predators sized up his major competitor. Now any bidder for Fairfax knows they can't get 100 per cent ownership and full access to its cash flows without buying off News.

Greater media concentration looms. Fairfax, with an open register, is in play and the golden prize. It has been the point of conflict between Packer and Murdoch, and Murdoch has now become the gatekeeper to the breakup of Fairfax. Packer is not really interested in Fairfax as a wholeas his corporate growth comes from his global casino business.

Are Packer and Murdoch creating two large or super national media companies with foreign ownership? Is that what is now in formation? If so, how do we ensure that media competition and diversity is preserved, if not increased? Through the limited digitial platforms? Will these be developed? Does that mean de-regulation of free-to air television? If thois does not happen, then Senator Coonan's media reforms are in tatters because the effect of the reforms will be just to entrench the power of Australia's media companies.

| Posted by Gary Sauer-Thompson at 5:07 PM | | Comments (2)


I do think there is a tendency amongst a lot of people to whine about media concentration etc. without thinking about the positives.

Frankly, with web 2 and the ability of entrepreneurs or groups of people to launch their own niche media plays, consolidation is a huge opportunity.

I agree with your comments about the whining and the digital possibilities. At that is economically successful is Most of the other on line sites are owned by the big corporate media. And they whine about media concentration.