Friday, 27 June 2014

Who owns what in Australian media - and the main reasons why the Abbott Government wants to cripple public broadcasting

Looking at the media platform breakdown in the Department of Communications Policy Background Paper No 3 Media Control and Ownership it is easy to discern the reasons why the Abbott Government is intent on crippling the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS).

Public broadcasting is too successfully competitive with the large commercial media platforms and its disturbs the increasing homogenous content of their political reporting and editorial stances.

This homogenous tone is something that Prime Minister Tony Abbott has been able to use to his advantage in the past.

A brief outline (quotes from the background paper are in italics):

Network Ten

Removal of the BSA’s foreign ownership restrictions in 2006 allowed Canadian company Canwest to convert its large economic interest in Network Ten to a voting interest of 56.7 per cent, delivering control of the company. However, in September 2009, CanWest sold down all its interests in Network Ten due to financial difficulties. Since 2010, large shareholdings in Ten Network Holdings have been acquired by companies controlled by Mr James Packer and Mr Lachlan Murdoch (8.8 per cent each which was, until 27 March 2014, a joint holding) and Ms Gina Rinehart (an original 6.34 per cent stake that has increased to 9.91 per cent).

Southern Cross Media Group (formerly Macquarie Media Group)

In 2007, the then Macquarie Media Group purchased Southern Cross Media Group for $1.3 billion in partnership with Fairfax Media. This deal required the divestiture of 15 commercial radio assets across nine licence areas that would otherwise breach the ‘5/4 rule’. In March 2008, Macquarie sold 19 regional commercial radio licences to various small regional commercial radio networks. In December 2009, Macquarie was renamed Southern Cross Media Group, and in May 2011, the company acquired the Austereo Group (including 10 metropolitan commercial radio licences and two jointly-owned regional commercial radio licences) for more than $700 million.

Fairfax Media

In May 2007, Fairfax Media completed a merger with Rural Press Limited that involved acquisition of a number of regional commercial radio licences and publications such as The Canberra Times. In November 2007, Fairfax Media acquired seven metropolitan commercial radio licences from Macquarie Media Group as part of the acquisition of Southern Cross Broadcasting (described above). This transaction also required the
divestiture of a commercial radio licence in Ipswich, which was sold to Grant Broadcasters. In October 2011 Fairfax sold its eight regional commercial radio licences to Grant Broadcasters for a reported $15 million.

 Consolidated Media Holdings and PMG / Fox Sports

Consolidated Media Holdings (CMH) was a subscription television investment company formed in late 2007 when Publishing and Broadcasting Limited (PBL) split into two separate businesses – Crown (a gaming company) and CMH (a media company). CMH held a 25 per cent interest in Foxtel and a 50 per cent stake in Premier Media Group (PMG). In 2012, PMG was renamed Fox Sports Pty Ltd. Also in 2012, News Corporation and Seven Group Holdings both submitted bids to acquire CMH. The ACCC opposed Seven’s bid but approved News Corp’s offer, which took effect from 2 November 2012. This transaction delivered News Corp full control of Fox Sports and 50 per cent of Foxtel.

Seven West Media (formerly Seven Media Group)

Following the 2006 media ownership reforms, Seven Media Group was subject to a joint venture agreement resulting in foreign investment company Kohlberg, Kravis Roberts and Co (KKR) acquiring a 47.7 per cent stake and Mr Kerry Stokes acquiring a 47.7 per cent stake through Seven Network Limited, which was subsequently renamed Seven Group Holdings. In early 2011, Seven Media Group was sold to WAN to form a new entity Seven West Media. Seven Group Holdings remains the majority shareholder of Seven West Media, but KKR no longer has a significant stake.

Nine Entertainment Co. / Publishing and Broadcasting Limited

Publishing and Broadcasting Limited (PBL) was formed in 1994 through the merger of the Nine Network Australia and Australian Consolidated Press. Following the 2006 media ownership reforms, PBL Media was formed as a 50/50 joint venture between PBL and private equity company CVC Asia Pacific Limited (CVC). In 2007, PBL spin-off company CMH sold down its shares in PBL until CVC owned over 99 per cent of the entity. PBL Media was renamed Nine Entertainment Co on 2 December 2010. In January 2013, the company’s debts forced a restructuring of its financing arrangements resulting in private investment firms Apollo Global Management and Oaktree Capital Management taking control of the company. On 6 December 2013, Nine Entertainment Co was listed on the Australian Stock Exchange.


On 26 May 2011, Foxtel announced its intention to acquire Austar, and on 11 July 2011 the two companies announced that they had entered into a definitive agreement regarding this transaction. The proposal received ACCC approval (subject to an undertaking) on 10 April 2012, and the take-over was finalised by 25 May 2012. This resulted in Austar being de-listed from the Australian Stock Exchange.

Prime Media Group

Following the 2006 media reforms, Prime Media, which had previously only owned and operated regional commercial television licences, began purchasing commercial radio assets. By 2009, Prime’s radio network included 10 regional commercial radio licences in Queensland. However, on 30 August 2013 Prime sold all of its commercial radio assets to Grant Broadcasters for $24.5 million, representing a large loss on its radio investments.

Nova Entertainment (formerly DMG Radio Australia)

In November 2009, Mr Lachlan Murdoch’s investment company Illyria Pty Ltd purchased 50 per cent of DMG Radio Australia from its owner, British media company Daily Mail and General Trust, for a reported $110 million. Illyria acquired the remaining 50 per cent of DMG Radio in September 2012, and rebranded the company as Nova Entertainment on 26 February 2014.

Australian Radio Network

The Australian Radio Network (ARN) was until recently jointly owned by APN News & Media (APN) and American radio company Clear Channel. On 19 February 2014, APN acquired Clear Channel’s 50 per cent of the company, as well as its 50 per cent stake in New Zealand’s The Radio Company, for $246.5 million.

Commercial companies controlling the maximum number of media platforms allowable under Australian legislation

The role of public broadcasting

An examination of the media diversity landscape needs to consider the role of the national broadcasters, the ABC and SBS. These organisations make a significant contribution to media diversity through their provision of television, radio and online services. This is particularly so for the ABC, the reach and depth of whose media outlets compare favorably to its commercial counterparts in most areas of Australia.

* In 2013 the ABC’s primary digital television channel (ABC1) held an average nightly metropolitan prime-time audience of 477,000 per night, which was notably higher than Network Ten’s average audience of 421,000 and placed it third on this measure behind the Seven Network (815,000) and Nine Network (738,000).

* The ABC has also increased its television news service through the introduction of ABC News 24 – a stand-alone, 24-hour news channel delivered on the broadcaster’s digital platform.

* The ABC Local Radio network is also widely consumed in metropolitan markets with 2013 surveys showing that its average daily audience consistently places it in the top three stations in the Sydney market and the top two stations in the Melbourne market.

* Most of the ABC’s broadcast news services are available online, either as streamed content or as catch-up programming, while the ABC News websites held a top 10 position alongside other domestic and international news websites in 2012 and 2013.18

The television, radio and online services provided by the national broadcasters, particularly the ABC, are also prominent in regional and remote Australia, providing audiences with an additional source of news and information in areas where there are frequently few local commercial media outlets. Community broadcasting services, predominantly radio, also add to the diversity of
services available to Australians, although their contribution to diversity of opinion and analysis (i.e. a news focus) is more limited given they tend to be ‘ultra-local’ (produced
by and relevant to particular local communities) or ‘niche’ (providing services of interest to local language or cultural groups within a particular local area).

Reach of media platforms

Looking at the platforms themselves, the print sector has historically exhibited relatively high levels of concentration, dominated by News Corp Australia, Fairfax and APN. In this
regard, it is notable that News Corp Australia and Fairfax titles are, on average, read each week by around 60 per cent and 36 per cent respectively of the newspaper reading public in Australia.

Commercial television and commercial radio, in terms of ownership at least, are more moderately concentrated, with six dominant commercial television networks and major commercial radio networks. However, affiliation agreements, programming syndication and joint venture operations tend to result in fairly homogenous content (i.e. channels and stations) being available to consumers in any given market. This in many respects distorts the picture of media influence across licence areas. For example, the leading opinion or ‘talkback’ radio programs emanate from Sydney with audience
numbers being captured in Sydney licence area ratings data. However, a program may be syndicated and broadcast in other substantial markets, typically regional NSW and Queensland, which significantly increases the reach of the program and therefore its total audience numbers.

There is also a relatively high degree of concentration in the non-regulated media platforms. Subscription television is dominated by Foxtel, with few alternatives beyond a handful of localised subscription television platforms and some IPTV offerings. While there are few regulatory barriers to entry in terms of online media, it is notable that the majority of the online news outlets and portals that are popular with Australians are either directly or jointly owned by traditional media platforms, a point noted in the
following section.

Overlaying the commercial media are the ABC and SBS that, to differing degrees, make a significant contribution to the provision of news and information in both metropolitan and regional areas.

Brief background of one American media mogul operating in Australia

“Scotland Yard detectives plan to interview media mogul Rupert Murdoch about a phone-hacking scandal that led to one of his former top honchos being convicted Tuesday on criminal charges.
Detectives have informed the 83-year-old Murdoch he’ll be grilled “under caution” — a warning given to suspects, according to The Guardian.
The interview is expected to take place in Britain in the near future and could include questions for Murdoch’s son, James, who was executive chairman of News International, the British newspaper reported.
Tuesday’s conviction of Andy Coulson — the disgraced ex-editor of News of the World and one-time flack for Prime Minister David Cameron — could leave Murdoch’s company vulnerable to corporate charges.
Murdoch could wind up being prosecuted under section 79 of Britain’s Regulation of Investigatory Powers Act, which holds company directors liable if evidence shows they consented or connived with the wrongdoings of employees.
At least 11 more trials are slated involving 20 other former journalists for News of the World and The Sun, British tabloids owned by Murdoch’s company.
Murdoch also faces a number of civil suits filed by victims whose phones were hacked. His company has already agreed to pay damages to 718 victims.
[New York Daily News, 24 June 2014]

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