There is a more than touch of irony in the news that Gina Rinehart has purchased a 10% stake in Ten Network, given her well-known dislike of giving media interviews or revealing very much at all about her vast mining empire, Hancock Prospecting.
While the Ten stake won’t exactly mean that Rinehart will be appearing regularly on Ten Network’s 7PM Project, it will mean at least a small slice of her empire will be open to a great deal of public scrutiny.
Indeed, Rinehart has bought into the biggest corporate drama in town.
Just weeks ago, James Packer launched a $230 million share raid on Ten, buying a 19% stake, half of which either has or will be sold to his good friend and fellow media baron, Lachlan Murdoch.
Both men have now have seats on the Ten board, and appear likely to push for change with Ten’s other billionaire shareholder — Bruce Gordon, who owns the WIN regional television empire.
Perhaps Rinehart wants to be in on this push for change, although her links with these three men are slight. Perhaps she was always planning to make this investment, and the timing is coincidental.
We’ve learned nothing from the woman herself — the company has released just a few lines saying it wanted to get into the media sector because of its “importance to the nation’s future”. So what could be driving Rinehart’s move? Here are a few scenarios:
She wants to diversify. Possible perhaps, given the vast bulk of her fortune is tied up in the mining sector. However, why media, and why Ten? Free-to-air television is not exactly a growth industry likely to generate the sort of returns of cashflow she can expect from mining. And Rinehart has no history in the sector — surely she could have diversified into something a little closer to Hancock Prospecting’s sphere, such as mining services or infrastructure or construction?
She wants to get behind Packer’s restructure. Again, it’s possible, but there is little evidence she has strong links to Packer, or really any links at all. It would be a big bet on Packer’s ability to ram through big changes from a board seat.
She wants to block Packer’s restructure. This is probably unlikely, given Packer and Murdoch appear to have the support of Bruce Gordon and his 13%, meaning they are well placed to push for change with or without Rinehart.
She’s betting on Packer making a full takeover. That would certainly earn her a profit on her shares, but at this stage at least that doesn’t appear to be on Packer’s agenda.
She wants a bit of political insurance. As media and business commentator (and Crikey founder) Stephen Mayne tweeted last night, the debate over the resources tax has politicised the mining community, and particularly Rinehart and fellow billionaire Andrew Forrest. Mayne argues that by buying into Ten, Rinehart is getting “political protection”.
There is probably something to this, particularly given the prominence Hancock Prospecting gave to the “nation’s future” in its brief statement. However, exactly how much “protection” Rinehart would get if she remains a silent shareholder and doesn’t take a seat on the Ten board is probably up for debate.
These scenarios all underline why Rinehart’s purchase is so unexpected and surprising. Until we know a bit more about Rinehart’s motives, and particularly whether she wants a board seat, we will still be in the dark.
But spare a thought for the executives at Ten Network. Dealing with four billionaire egos is likely to provide some serious headaches over the coming months.
*This article was originally published on Crikey sister site Smart Company
It beats me why any of them are interested in TEN. It’s been the bottom fisher since its inception.
Stephen Mayne has hit it on the head. Wait till the “the hole left in the ground Tax ” is back and see how many sh#t sandwiches gets put on the ( TV ) plate .
They could be just buying into it ,to play with it ? Bored Billionares . I wonder how Jamies US casino’s are travelling ??
I say that 10 is going to be the vessel for much more…. Further takeovers etc under the ten banner a new national player in the making…. Just wait.
There’s no real mystery about this.
It’s hard to find a decent game of poker these days. Channel 10 Board meetings are shaping up as one of the few occasions when a plutocrat can win a decent pot from fellow billionaires.
I’ve considerede throwing in a few hundred million dollars myself but I think I’d rather buy the ABC.