Nine Chairman Peter Costello and CEO Hugh Marks
One of the Liberal Party’s most senior figures, former treasurer Peter Costello, will chair Australia’s largest media company as a result of the Nine Network’s takeover of Fairfax. The “merger” will dramatically reduce media diversity at a national level and likely bring further big reductions in editorial staff, in what is a major win for the Liberal Party.
In 2017, the Turnbull government removed the final impediment to a Nine-Fairfax merger when it repealed the “two-out-of-three” rule that prevented a company from owning a newspaper, television licence and radio licence in the same market. That paved the way for Fairfax (which owns both newspaper and radio assets in Sydney and Melbourne) to be acquired by Nine (a free-to-air television licensee) with the new entity to be chaired by Costello, who unsuccessfully championed the removal of two-out-of-three when treasurer in 2006. That a senior Liberal will now oversee the dominant free-to-air and newspaper company in Australia is great news for Malcolm Turnbull and his party.
The takeover illustrates how Australia’s now limited media ownership rules fail to protect diversity. The primary diversity protection remaining in legislation is the “5/4 rule”, which prohibits the number of media groups in TV, radio and newspapers from falling below five in the state capitals and four in other markets. Sydney and Melbourne are well above five given the large number of radio licencees and two daily newspapers. However, at a national level, Australia has now lost one of a small number of major media companies that have the power to shape the national agenda — a list that is limited to the Murdochs, the Stokes, Nine, Fairfax and Ten.
According to the ASX statement about the takeover, it will yield $100 million in savings over two years — this paves the way for a significant reduction in staff at the combined entity, including journalists, editors and producers as Nine looks to cut costs to justify its acquisition.
However, the longer-term impact is likely to be even more significant: successful media mergers or major acquisitions in Australia (or overseas) are very rare. They usually result in someone losing a lot of money. That’s not just the 20th century experience of Bond, Skase and Lowy, it’s the 21st century experience: CVC eventually lost $1.8 billion when it bought Nine from James Packer after the 2006 media changes. Lachlan Murdoch, Packer and assorted billionaires did their dough buying into Ten. This eventually translates into lost jobs, smaller budgets and cuts to the high-cost area of production like news-gathering. That two-year period of job cuts is likely to turn into several years of them as the promised synergies, efficiencies and “value creation” that are being used today to justify the takeover fail to materialise.
And forget about any “independent” criticism of Nine’s news coverage or programming — the appalling Love Island, or 60 Minutes’ next debacle, or further close co-operation between Fairfax’s top journalists such as Adele Ferguson, Nick McKenzie and others, and ABC programs like 7.30 and Four Corners. Instead, journalists will no doubt be pressed into combined TV and print roles — and how long will Nine want to keep print editions of the Herald and Age going?
The Financial Review might survive, however: Costello will favour it because it generally hews to the Liberal line, and has enthusiastically changed editorial tack to reflexively favour the interests of the Business Council and major corporations that sponsor its events in recent years.
Another great chapter in Australia’s storied history media diversity.
Welcome to the land of the living dead!
“…Fairfax (which owns both newspaper and radio assets in Sydney and Melbourne) ” and Perth where talk station 6PR is a licence to print money. Apart from ABC news all Eastern Oz based reports seem to have ignored WA assets. Not trying to suggest that WA is ignored on your side of this continent or anything but…WA is pretty much ignored on your side of this continent.
It comes of the rants about seceding. Who wants to devote valuable caring time to people who might not be there next week?
Nah, the rants of seceding are nearly all from journalists with nothing to write about on a slow news day. 27% of us were born overseas and probably another 15%-20% from interstate. Secession would be a non-starter and everyone knows it. My remark probably came across as a bit of a whinge but being out of the way of Sydmelberra isn’t bad. We can get to Asia in under four hours. We can fly nonstop to Europe. Yet we can still fly cheaply to Sydney or Melbourne whenever we want to. Come and have a look.
I was just being facetious (and I thought the rants of seceding were almost all Colin Barnett or the WA Nationals).
The writer was speaking in the context of the cross-media ownership law changes. Fairfax owns newspaper AND radio in both Sydney and Melbourne, which would have blocked this merger under the old lawys since the combined Nine Fairfax will have all three of newspaper, radio and TV in those markets. Fairfax has radio not only in Perth but in Queensland too, but those assets wouldn’t have blocked the Nine deal.
Typical doom and gloom Crikey take on the real world. You could have written a by line about Fairfax being saved by this merger. But no! If Peter Costello is a part of this then it must be bad because he is pure evil (suggests this piece) as he has links to (watch out!) the dastardly Liberal Party. This piece is Crikey journalism at its very biased worst as Peter Costello actually has a bloody good track record as a politician, a lawyer and as the guardian of our Future Fund, the only politician we’ve ever had who has actually created something like the Norgewian Sovereign Wealth Fund. But no, Crikey, what a joke you are-instead you paint Costello as some bad guy rather than a leader of Australia’s corporate elite who’s played a part in possibly saving a media company that’s been hopelessly managed for decades.
Heather do you really think Peter Costello has a good track record as a politician? The man who was treasurer during the biggest mining boom this country (and probably any country) has ever seen, who invested nothing in education or infrastructure to name just two areas. Further, he distributed largesse to middle class people who did not need it, and has made it very difficult politically to wind any of this back, as we are now seeing, with the opposition to Labor’s policy with dividend imputation cash to stop people who have not paid tax getting “refunds”. Further, he was the man who sold Telstra – another stroke of genius. We could have had a world-class broadband rolled out by now if that sale had not been made.
“St Peter – The Patron Saint of Middle Class Welfare” – we’re still paying for.
…And Principal Priest Poobah of the Presently Popping Property Ponzi.
One wet Bronx cheer for the great spineless fiscally incompetent one…
John Bushell comments that with the politicisation of the heads of Federal Treasury and the Productivity Commission, the Inquiry into the SBS and ABC and now the Nine / Fairfax merger it would appear that Paul Keating’s “banana republic” has finally arrived in Australia – complete with tinpot dictator.
If you really think that this merger is somehow going to be good for Australia, & for a balanced media landscape, then you have rocks in your head…
If you think the Future Fund is anything like the Sovereign Wealth Fund of Norway, then your knowledge of economics is even worse than that of Costello.
‘…. who has actually created something like the Norgewian Sovereign Wealth Fund.’
And this was only a few years after Costello sold two-thirds of Australia’s gold reserves having denounced gold as old hat & its days being over. Needless to say the gold later soared. What a seer.
This is the same Peter Costello who, as Treasurer, banned Crikey from covering the Budget (in the official journo lock-up) as he believed online news providers were lightweight & not worthy of inclusion. Only traditional media was welcome. So much for the far-sightedness of Costello.
Luckily we can rely on you to parrot the LNP line to save us from all this “Lefty propaganda” Heather.
Only in your dreams, only in my nightmares!
Thanks for your astute unbiased observations Heather! Looking for a job with Rupert, are you?
Hey Heather, here’s a little comparison between Norway’s Sovereign Wealth Fund & Costello’s Future Fund:
The former was created by taxing multinational companies extracting oil from the North Sea, & the interest earned on that money is used fund Norway’s Health, Education, Welfare & Infrastructure. The latter was created using a scam that involved selling tax-payers shares in a company they already owned (Telstra) & the money is strictly quarantined for paying the pensions of Public Servants…..which is more to do with making the Librorts Party look like better economic managers than they ever were. The welfare of the nation as a whole doesn’t even get a look in.
Oh, & others have said, Costello is the bloke who sold most of gold reserve at the bottom of the market, oversaw the privatisation of a number of key public assets (worth around $100bn+ dollars), & raked in over $300bn in tax receipts as a result of the mining boom……yet still left office with only a tiny budget surplus in place…….& little else to show for all the money he & Howard p**sed up against the wall.
Only Liberals or party donors need apply?
Peter cleverly sold our Gold reserves before they went up in value, because the mining boom was the magic pudding, not to worry.
Pete cleverly called his new “catch all cash” Federal Superannuation Fund “The Future Fund” so that the sheeple would think all that privatisation loot was being looked after for THEM! So easy. Labor on board! Yep. Clever.
(EVERYONE WOULD BENEFIT, RIGHT!) No.
Guess who got the top job at his new FF. Clever.
Then he cleverly made all super payments TAX FREE. So clever, only Peter could pull it off.
So Heather this is a sample of the ill informed diatribe we are like to have served up to us due to the take over of Fairfax by the Nine network?
For starters please get your facts right before posting your comments.
If you believe, for example, that Costello’s profligate spending of 90% of a $334b revenue windfall in the last 3 years of the Howard government on tax cuts and middle class welfare, rather than infrastructure, is an example of him having had “a bloody good track record as a politician, a lawyer and as a guardian of our Future Fund”, then what would be “bloody bad” ?
Your attempt to equate our Future Fund, that he created, with “something like the Norwegian Sovereign Wealth Fund” is incorrect. The FF was created to ONLY look after the requirements of our retiring federal public servants . The Norwegian SW Fund was created to benefit ALL Norwegians. I recommend Paul Cleary’s “Trillion Dollar Baby” to understand what the Nowegian’s HAVE & what we NEED!
“Nein Core Promises”?
….. Will Niki Savva be going to Fairfax?
“NeinFax”?
Well after this merger I guess we can expect the political coverage of the Fairfax mastheads to veer even further to the right. Soon you won’t be able to tell the difference in on op-ed in The Australian and one in the SMH as climate change deniers, IPA goons and Business Council foghorns are given column inches that used to be filled by professional journalists. Thank god for the likes of Crikey, The Saturday Paper and Guardian Australia.
Absolutely Petunia+++