The origins of the debt crisis that has engulfed Nine Entertainment Co lay in the Howard government’s overhaul of media ownership laws in 2006.

As industry insiders predicted would happen, the moment the long-standing prohibition on foreign ownership of a media company was removed, private equity and US pension funds moved in on Nine — to the delight of James Packer, who was looking to undertake a long-term transition from broadcasting to gambling. Whether John Howard and Peter Costello knew about the pending deal when they pushed the Nationals hard to approve the media ownership changes in 2006 will always remain unknown, but the changes squeaked through the Senate on the back of Steve Fielding’s support, after Barnaby Joyce crossed the floor.

CVC Asia Pacific may now be wishing the bill had never succeeded. They’d have avoided overpaying for Nine and lumbering the company with a debt that, even before the financial crisis, looked hard to manage.

Despite constant chatter about the impact of the internet on mainstream media revenues for a decade, it’s also clear no one at that point understood just how serious the threat from new media was. In the intervening six years, newspaper revenues have slumped and television audience numbers, while healthy compared to the print industry, have started to reflect the impact of a global content market in which traditional gatekeepers like Nine can no longer control when and how Australians consume their content. A decline in traditional consumer spending in favour of food, cars and overseas travel hasn’t helped advertising revenue.

Nine has been in similar straits before: a famous previous owner paid too much and then couldn’t service his debt obligations. But in 1990, when Kerry Packer had his Alan Bond moment, he could be sure the fundamental free-to-air TV model was sound and generate strong revenue for a smart, politically influential owner.

If that assumption still held in 2006, it certainly doesn’t now.