How much — in cold hard dollars — have the government’s new media laws enriched Australia’s media owners? We know that protection of the existing free-to-air TV regime and changes to the cross-media rules have been like a wet dream for media companies — but how much of a wet dream?
Crikey put this question to several stockbroking media analysts: put a price on the benefit to media owners of the government’s legislation.
Their view is that the caulculation should be made by comparing media company share prices from the point at which the market started to factor in the media laws bonanza — only about a month ago, due to lingering uncertainty over whether the laws would be passed by the Senate.
So here’s the result. This table compares the market capitalisation of 11 major media companies between 18 September and 18 October (except Fairfax, where we valued the company using the $5.20 paid by Rupert last night to more accurately reflect the media law premium):
Austereo: Market cap rise: $700-765m. Gift: $65 million
WA News: Market cap rise: $1.92-2.22bn. Gift: $300 million
PBL: Market cap rise: $12.49-13.93bn. Gift: $1.44 billion
Fairfax*: Market cap rise: $4.09-5.25bn. Gift: $1.16 billion
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APN: Market cap rise: $2.35-2.51bn. Gift: $160 million
Southern Cross: Market cap rise: $925m –1.06 bn.Gift: $135 million
Seven: Market cap rise: $2.06-2.05bn. Gift: – $10 million
Rural Press: Market cap rise: $2.21–2.42bn. Gift: $210 million
Ten: Market cap rise: $2.62-3.09 bn. Gift: $470 million
Sunrayasia TV: Market cap rise: $148-159m. Gift: $11 million
Austar: Market cap rise: $1.40-1.65bn. Gift: $250 million
That adds up to almost $4.2 billion, which is at the high end of the anecdotal $2-3 billion value the analysts initially put on the law changes. But it’s worth remembering this is only the story so far and there’s probably still a lot more to be made.
Interestingly, so far, Channel Seven has been the only loser out of the new laws. According to analysts the company is being punished for being a buyer in a seller’s market.
And of course the government’s generosity will have its own rewards. Not only does it make a string of media owners incredibly grateful to Mr Howard and Senator Coonan, it will reap a capital gains tax bonanza from acquisitions — in the order of billions back to the government coffers.