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Media

Mar 2, 2016

Fifield's weak media changes help the billionaires, do little for the bush

Despite the hype, the government's media ownership reforms are relatively modest. And history shows they're not likely to successful mergers. Bernard Keane and Glenn Dyer write.

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The changes to Australia’s media ownership laws proposed by Communications Minister Mitch Fifield yesterday were, he said, the biggest in a generation. In question time, the Prime Minister called them “micro-economic reform”. Both were, shall we say, gilding the lily.

The proposals are more or less what was expected: the 75% national reach rule for television broadcasters and “two out of three” (only being able to control two of radio, print or television in a radio licence area) are to be dumped, but regional television broadcasters face higher local content requirements if they merge or change hands. That’s it. Compared to the Howard government’s 2006 package — which initially included dumping two out of three as well — it’s a decidedly minimalist package. The “four or five”rule — the number of newspaper, TV and radio groups in a radio licence area must be four in regional areas, five in capital cities — will remain, there are no changes to anti-siphoning, ownership limits remain confined to the dinosaur media of newspapers, TV and radio.

Removing the 75% reach rule is, strictly speaking, micro-economic reform — it’s an ancient rule from the television dark ages that everyone, except powerful incumbents like Kerry Stokes who want to keep their competitors shackled, believes should go. Labor proposed to get rid of it some years ago. It will enable the merger of the second-tier of commercial television broadcasters — WIN, Prime, Southern Cross — with the metropolitan broadcasters. Nine, for example, has been linked to both Southern Cross and WIN, whose owner Bruce Gordon also has a large chunk of Ten as well as 14.9% of Nine (and who seems increasingly frenetic to do some sort of deal — to the point of suing Nine over the latter’s plans to stream its live broadcast across Australia, as Seven is already doing).

Such mergers will trigger higher local content requirements in regional areas under the changes proposed by Fifield. In truth, though, local television content is a subsidiary issue in the bush — ACMA found that more than 90% of people in regional communities were satisfied with access to local content. It’s local newspapers that are a more important source of local news than broadcasters. And the reform package won’t address the biggest threat to diversity and content in regional areas: the slow implosion of print. Fairfax and APN are the two major regional print princes, followed by News Corp. Fairfax is gutting its regional media group to cut costs — with another $60 million on the menu this year. APN put its 16 dailies in regional NSW and Queensland on the market — after writing down the value by more than $50 million last week. News owns 14.9% of APN (and has lost millions in doing so), so it is the logical buyer of the APN papers but will need the approval of the competition regulator.

The regional dailies, bi and tri-weeklies and weeklies controlled by these princes of print are the prime news source for regional TV and radio newsrooms, along with the ABC. Should print decline, then regional radio and TV decline as well.

The lack of movement on anti-siphoning has already upset News Corp and Foxtel. Anti-siphoning (a set of restrictions that prevents pay-TV licensees from bidding freely for sports rights for listed events) is, to borrow Mungo MacCallum’s phrase, the unflushable turd of Australian media policy, despite the repeated efforts of communications ministers to deal with it. The anti-siphoning list still contains relics like the FA Cup Final, Wimbledon, the US Open, the Davis Cup and the US Masters on it, as well as higher-profile Australian sporting events that mean sporting rights holders are forced to deal first with commercial television broadcasters, reducing the competitive value of their content. With Foxtel under increasing pressure from competitors like Netflix and downloading, live sport remains the one guaranteed revenue driver for pay TV, making reform to the anti-siphoning list more important than ever for News Corp (which also wholly owns Fox Sports, which provides sports content to Foxtel). The government’s decision to leave any anti-siphoning changes on the back burner means yet another parliamentary term will end without any changes to the scheme, last substantially changed by Stephen Conroy when he remade the list in 2010.

As for two out of three, that will open the way to News Corp and Fairfax acquiring or merging with a television network. Both News and Fairfax currently have radio licences in the major capital city markets (News through Lachlan Murdoch’s Illyria, which owns Nova). How much value such mergers would yield, however, is a real question. The history of changes to Australian media laws is also the history of disastrous, value-destroying media mergers pursued by excited moguls and would-be moguls, right up to CVC’s purchase of Nine from James Packer following the 2006 changes. Yesterday, Seven’s Tim Worner dismissed the changes, saying they “might be great for the deal junkies out there” — Worner is only interested in cuts to television licence fees, not in seeing his competitors get more regulatory options for expansion. Labor gave the TV networks an election year licence fee cut in 2010. Don’t rule out another election-year cut in the May budget, especially with Fifield yesterday referring to the fee as a “super-profits tax” rather than a fee for making money off a public asset — spectrum.

And what is the market telling us? As Crikey pointed out earlier this week, the shares of all major media groups have fallen in the past month as this legislation has wandered through the government — bar one, Seven West Media, Kerry Stokes’ TV and print love child. And the biggest loser in the same time has been News Corp: its Australian shares have plunged 20% in the past three months, and more than 12% in the last four weeks. Being the biggest prince of print, the potentate of pay-TV and the overlord of online real estate doesn’t impress anyone in the markets these days …

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8 comments

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8 thoughts on “Fifield’s weak media changes help the billionaires, do little for the bush

  1. klewso

    Another ““Vrai Regressive, Dilettante/My, Albert Field Labour Party Side of Politics Party” lecture from our own Professor Cuthbert Binns “Lecturer in the History of Conservative Magic”.

  2. Norman Hanscombe

    Courageous anonymous browser, your ornithological skills may be such that you can tell a duck from a dodo, but with political issues your beliefs may best be summed up with the proverbial dead as a dodo saying.
    I have no difficulty accepting that you’re unaware of aspects of A.L.P. / Trades Union such as:
    There was a person who took on the NSWALP Right Wing in their strongest region. When he started the Left controlled one SEC and no FECs but when he finished the Left controlled 11 SECs and all the FECs. The one SEC the Right still held was one he allowed them to retain as a favour to the Reverend Alf Clint Founder of Tranby because Alf didn’t wish him to upset John Ducker in case the NSW Government funding of Tranby was affected.
    There was a person who removed the NCC Santamaria / Harradine influence completely from the Tasmanian State ALP.
    There was the person who provided the numbers which enabled Bill Hayden to remove the crooked Qld Right Wing ALP Executive, and much more.
    There was a person who did much more including representing two States at the National Executive level, including Western Australia at a time when he neither knew anyone there in the ALP nor had even set foot in the State. [Understandably the ALP Rules were changed after that.]
    There was a person who held senior positions in three States including being elected to two State Policy Committees in Victoria when he wasn’t on any of the three Factions’ Tickets.
    There was much more that could be quoted, but that’s enough to describe the actions of someone you deem to have no significant connections with the Left.
    Is it being even a tad harsh to suggest that’s why basket weaving seems to be more in your ability range?

  3. browser

    Norman. Please don’t tell me you are not totally denigrating of anyone whose politics you disagree with and also their education, literacy etc. Fight the right wing, I doubt it, I’ve never heard a negative word from you about any wierdo right wing policies. Good luck to you but if it walks like a duck, it probably is a duck.

  4. klewso

    ‘A billionaire in hand is worth a horde in the bush.’

  5. Norman Hanscombe

    Browser, to help provide the assistance your friends have failed to come good on:
    Educated acquaintances should help you with this basic usage of question marks which was readily available from Primary School onward in the 1940s.
    As someone who actually fought successfully against the Right Wing for over 5 decades I suspect I’ve done far more than you? [P.S.,the question mark here was optional]
    I really am not in as good a position as you are to explain how / why you could doubt me.
    I can’t discuss what you’ve been told about anyone’s intelligence, but I suggest you do as I’ve done since I was in Junior Primary and doubt I was as bright as the experts persistently assured me I was.
    Don’t believe those who tell you everyone else is a fool. That clearly can’t be correct in every case. Best of luck with your personal growth.

  6. browser

    Norman
    Learn when to put in a question mark or are you illiterate?

  7. browser

    Norman
    Is it possible for you to disagree with anything proposed by the conservatives? But then again I’ve been told how intelligent you are and everyone else are fools. How could I doubt you?

  8. Norman Hanscombe

    You may not like what’s suggested, but what about Crikey ‘experts’ putting together what they believe should be done, and to Hell with any financial disadvantages to themselves; but of course we can’t expect a capitalist enterprise such as Crikey to do that, can we.

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