Wednesday, 5 February 2014

What needs to be remembered about the last Sky News bid for the Australia Network

The Australia Network is being criticised as part of the Abbott Government attack on public broadcaster, the Australian Broadcasting Corporation (ABC).

Federal Coalition Foreign Minister Julie Bishop is quoted as saying that she is concerned the ABC's $223 million Australia Network is failing to meet its charter obligations and confirming she is reviewing the service's contract and, a former Coalition foreign minister Alexander Downer stating that he found the Australia Network indefensible.  

In mainstream and social media discussions, the possibility has been raised that this attack is payback for what is alleged to have been a past payback against News Corporation when Sky News lost a 2011 government tender for the Australia Network it had been very confident of winning.

However, everyone is forgetting a little history.

In 2010 the Department of Foreign Affairs and Trade (DFAT) advised the Rudd Government that the ABC was its preferred operator of the Australia Network. However, Treasury and the Dept. of Finance advised that a tender process would be the best option to ensure value for money.

A request for tender was released by DFAT on 4 February 2011. Only two broadcasters responded - the ABC and Australian News Channel Pty Ltd which owns and operates Sky News Australia.

The Secretary of DFAT was the official approver in the Australia Network tender process and, the chair of the Tender Evaluation Board was a former DFAT deputy secretary and ambassador. Approximately seven months later the Communications Minister became the tender approver.

The Gillard Labor Government finally terminated the Australia Network tender process in early November 2011 on legal and departmental advice, after what the Auditor-General has confirmed was confidential tender information was leaked to the Australian media from June 2011 onwards; and in the wake of the five year-long News Corporation U.K. ‘phone hacking’ scandal which resulted in ongoing revelations throughout 2011 and in the U.K. Parliament Leveson Inquiry which began on 14 November.

Australian News Channel was compensated when the tender process was terminated.

Australian News Channel is a joint venture of Nine Digital, a division of Nine Entertainment Co, Seven Media Group and British Sky Broadcasting.

At the time this tender was halted New Corporation owned a 44 per cent share of British Sky Broadcasting through its subsidiary News Limited.

Although these shares were later sold, in 2013 News Corporation (through 21st Century Fox UK Nominees Limited) still retained significant holdings of voting rights in British Sky Broadcasting shares and 21st Century Fox's President & Chief Operating Officer had joined its board of directors.

Rupert Murdoch is Chair and Chief Executive of 20th Century Fox Inc. Rupert Murdoch and the Murdoch Family Trust appear to be majority shareholders.

The fact that a major shareholder in a joint venture partner in Sky News was the subject of a U.K. parliamentary inquiry must have factored into decisions resulting from what Prime Minister Abbott is now calling a 'particularly dodgy' tender process.

Given that former senior management and staff of News Corporation (now News Corp) newspapers are still on trial at the Old Bailey in London in 2014 and given the numerous U.S. legal proceedings Murdoch business practices have attracted (20th Century Fox Inc, AGM 2013,Pages 33-37), I would have thought it wise to retain the Australia Network within the ABC and not even consider handing it over to a private broadcasting corporation such as Sky News or to any other joint venture which might be progressed by Rupert Murdoch.


Jennifer Frank said...

Regarding the payback issue, it's a bit confusing. So regardless of profit, Sky News wants Australia Network just for the sake of having it? Is my understanding correct? If it is, then they should go back to Business School or something if that’s what they really want. Personal issues aside, I think SKY news has a different plan for Australia Network other than a petty payback. They are bidding for it, hence will cough out a lot of money. Wouldn’t this be a move of Sky News to seize the opportunity of a larger profit?

clarencegirl said...

No, the alleged payback was on Labor's part.
2Oth Century Fox would see successful bid for Australia Network as a profitable asset and, a platform for extending Murdoch's Fox News etc., audience reach.

Anonymous said...

Remembering of course that Abbott regards Murdoch as a hometown hero. So anything he has brought to the table appears to have the benefit of the doubt over the ABC management of the Australia Network. Its not just another asset, Murdoch regards the break up and privatisation of the ABC as an absolute must for his empire in Australia.