If you’re worried about powerful billionaire oligarchs further extending their reach into the already concentrated Australian media scene, then two deals completed in recent weeks should be cause for concern.
Kerry Stokes’ Seven West Media finally got on top of its debt burden to take out its regional affiliate Prime Media in a $132 million purchase that completed on December 31, sparking triumphant claims from its CEO James Warburton that the deal was “a real game changer for Seven and the Australian media” because the combined group will be able to reach more than 90% of the population.
While Stokes is a less influential media proprietor since ditching his magazine interests and selling out of Foxtel, Fox Sports and Sky News to the Murdochs, he is clearly now the king of all things Seven, which has the broadcast rights for our two biggest national sports, AFL and cricket. He also has particular power in his home city of Perth where he controls the monopoly daily newspaper, The West Australian.
Billionaires are more attracted to the media and tech sectors than any other because they love the power and influence it can buy them. Stokes first got into the media when he wanted greater protection for his Western Australian property development operations.
There is no greater exponent of this than Rupert Murdoch, who turns 91 in a few weeks and shows no signs of slowing down. Indeed, if you can believe this overly optimistic silly season Chanticleer column in the AFR, News Corp is about to unveil a slew of deals that will unlock $9 billion of hidden value.
You can’t ever imagine a News Corp business columnist writing an upbeat column talking up the prospects of Nine Entertainment, but that’s just how the Murdochs roll, using their editorial power to endlessly belittle and attack competitors.
One competitor who hasn’t been attacked in recent years is the old APN News & Media, which is now bizarrely called Here, There and Everywhere, or HT&E.
That’s because Murdoch lifer Michael Miller ended a 21-year run at News Corp to become CEO of APN in May 2013, when it was still controlled by the O’Reilly family in Ireland. This was just after the Irish parent called an EGM to sack six directors, including CEO Brett Chenoweth, and then settled with mass board resignations.
Under Miller, APN locked up Kyle & Jackie O on a five-year deal and launched a big investment push into radio, spending $246.5 million buying out US firm Clear Channel from its 50-50 joint venture in the Mix and Classic stations network across the country and paying Fairfax $78 million for 96FM in Perth in late 2014.
The following year, the two major Irish shareholders agreed to sell their combined 30.8% stake at just 88c a share and News Corp swooped, picking up a 15% stake, the maximum allowed under Australia’s cross-media ownership laws.
Given that Lachlan Murdoch privately owned the Nova radio group by this point, any larger News Corp investment in APN would have breached the rule limiting anyone from controlling more than two radio licences in a single market.
With the Irish billionaires departed and News Corp maxed out as a 15% APN shareholder, Rupert then poached Miller to return as News Corp’s executive chairman in August 2015 after just two years and four months at APN. Before long, Miller had negotiated a deal for News Corp to buy APN’s 12 daily and 60 community papers, which were concentrated in Queensland, for $36.6 million. If ever the Australian Competition and Consumer Commission should have knocked back an expansion, it was this creeping acquisition by Australia’s biggest newspaper company — but it was waved through in December 2016 with no conditions.
In May 2017 we saw the name change to HT&E. With Miller gone from APN, News Corp needed to resolve who would be its friendly directors on the board.
When long-term chairman Peter Cosgrove bailed in June 2018, shortly after the debt-eliminating $570 million sale of APN’s Adshel outdoor business to oOh!media , the board conducted an external search for a new chair. It came up with Hamish McLennan, despite his obvious News Corp connections — having worked for the company in Sydney and New York, done a stint helping out Lachlan as executive chair of Network Ten, and being the News Corp nominee as chair of REA Group.
News Corp and McLennan had happily worked with Roger Amos as an independent director at REA Group, so Amos was slotted in as an additional HT&E independent director in 2018, just one month after the new chair was appointed. All very cosy.
Not a lot happened over the next two year besides handing over $71 million in a settlement with the ATO in October 2021 and then it launched the big bold move of paying $307 million to buy Grant Broadcasters, a little-known but impressively large network of regional radio stations which will now presumably take a lot more Kyle and Jackie O across the country.
News Corp was the second largest shareholder in HT&E, with 14.8% going into the Grant Broadcasters deal. The controlling Cameron family elected to take 25% of the consideration in shares, so on January 5 it lodged this substantial shareholder notice declaring an 11.55% stake in the company.
News Corp couldn’t even get the basic governance disclosure right. Section 671B of the Corporations Act requires that investors must notify the ASX within two business days of any change of more than 1% in their substantial holding in a public company.
The January 4 Cameron family share issue therefore triggered these timely ASX announcements by the other substantial shareholders:
- January 6, 11.30am: Celeste Funds Management revealed it is no longer above the 5% substantial shareholder threshold
- January 6, 4.36pm: largest shareholder, Allan Gray Funds, revealed it had been diluted down from 21.17% to 18.82%
- January 6, 4.58pm: Perpetual disclosed it had been diluted down from 14.28% to 13.24%
- January 7, 4.45pm: CBA revealed it was no longer substantial.
After I complained to the Australian Securities and Investments Commission yesterday morning, we finally heard from News Corp at 9.58am, eight days after the Cameron share issue, in what was a clear breach of the law. Sure it’s the silly season, but it’s not as if News Corp isn’t connected to the HT&E board through McLennan.
The filing revealed it has diluted down to 13.12%. Surely that is not a big enough stake to have one of its own associates calling the shots as chairman, particularly given the sensitive regulatory and competition issues. Let’s hope the Cameron family pipes up and insists a genuinely independent chair is appointed.
It is possible that there has never been, over past ninety (90) years of ABC Media, a time of greater threat to our national independent public voice . . . than now!
Most younger people (and even oldies like me) use the internet for their radio and podcasts. The radio is relatively passé except for music – nah! most use Spotify etc so they can actually listen to the music they want to hear.
Those who prefer the Murdoch stable are also probably eagerly subscribing to far right podcasts of the Qanon ilk – for free. Murdoch’s paywall is a boon to me, as I can’t accidentally access his garbage.
there are those who do not have good internet access to use for ‘podcasts’ and internet radio (Thanks for nothing, NBNCo..) and still rely on FTA broadcast radio and TV and read newspapers (despite the Murdoch/Nine duopoly)
Radio, especially AM radio, is vital in a lot of rural and regional areas with poor internet coverage. It is vital for coverage of emergency situations, and just for staying in touch. I think a lot of people forget this, and I’m certain that a lot of national party politicians forget it.
So Lachlan Murdoch is determined to get a stranglehold on talkback radio and is seeding regional and local websites and funding startup influencer websites. All clandestine operations to flout monopoly rules and enhance his political clout.
It’s Lachlan’s US Republican “take no prisoners” approach, on the basis that if they keep the Coalition is in government they will get away with it.
Rupert’s mantra is based on the proposition that you don’t have to own it to control it. Just buy the largest slice and make the rules.
Their ‘Golden Rule’,
“He who makes the rules gets the Gold”
What’s egregiously avoided in Australian (and UK) media is highlighting that Lachlan Murdoch and the head of the Jewish ADL Anti-Defamation League Jonathan Greenblatt, have been in correspondence for sometime regarding Fox’s and Tucker Carlson’s penchant for promoting ‘the great replacement’; which partly underpins much of the GOP’s success in monocultural regions and one guesses it’s the new battleground for political influence.
More impetus, as if they needed it, to go after the ABC. I’m sure the IPA is excited.
The real Evil Empire