Well it will be bad news for Seven Network’s magazines business and for the mags in ACP, now housed in the associate of PBL: there’s a new player in the industry in Australia. One with the deepest pockets of all.
Rupert Murdoch’s News Corp is back as a player in the Australian magazine business after selling out to Seven in a failed corporate play in the 1990s.
News Ltd’s $150 million buy of the 25 titles in FPC’s magazines business from Sydney’s Hannan family makes News the third player after ACP and Pacific, but the one with the necessary resources to attack the bigger rivals.
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Hannan retains the printing and distribution contracts for the magazines for five and three years, respectively. And you can see the genius of the News buy in that arrangement: There’s continuity of quality; there’s lower printing costs and the distribution side of Hannan, NDD hasn’t been tainted by the botched distribution outsourcing of the past three years by ACP and Gordon and Gotch (which distributes Pacific’s magazines).
Therefore it will be cost effective from all sides. ACP bid but relations between the Hannans and the Packer camp have been strained since John Alexander moved some ACP magazine contracts away from Hannanprint years ago to “punish” the group for having ambitions to grow in the sector and saying so publicly.
Seven should have really bought the magazines but it wasn’t even in the race –the underbidder was BBC Worldwide, the international media arm of the BBC.
This means that News Ltd now can match the promotional and ad deals offered by Seven and PBL/Nine. News doesn’t have a free-to-air network but it does have that 25% stake in Foxtel and half of Fox Sports.
When News Corp moved to the US two years ago, primary responsibility for the non-Telstra stakes in Foxtel fell to PBL. Will News now start trying to win some back?
One thing to watch is the contract for the Foxtel monthly magazine, now held by ACP. It is the mag with the biggest print run in Australia and you’d have to bet there will be an arm wrestle by the newly acquired mags business to win that deal.
Suddenly the cosy duopoly of ACP and Pacific has been changed.