While you got no sense of it reading the Murdoch press this morning, there is a pile of delicate regulatory governance issues that arise with the $3.3 billion privatisation of Consolidated Media Holdings.
The first and most important is Lachlan Murdoch’s attempt to remain on the News Corp board. He can’t possibly make this claim on the front page of The Australian today:
This is completely my own transaction. This is nothing to do with News Limited, or for that matter, News Corporation.
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As a director of News Corporation and an heir to the Murdoch fortune, it is simply impossible to make this distinction.
The chutzpah of attempting to stay on the News Corp board is simply incredible. The regulators from ACMA to the ACCC to Labor Communications Minister Stephen Conroy should be crawling all over this deal because it constitutes a substantial increase in Murdoch family control over the Australian media.
Remember when Kerry Packer funded former PBL executive chaiman Brian Powers into a Fairfax stake through the old FXF Trust. That sparked an ABA inquiry and so should this.
The one nod to conflict of interest questions comes in the way the 27% stake in Seek will be distributed to existing CMH shareholders, leaving James Packer with a personal 10% stake and Lachlan Murdoch with nothing.
This is appropriate because News Ltd’s Careerone.com.au, Seek and Fairfax’s Mycareer.com.au are the three big players in Australia’s online jobs market.
However, there’s no such problem with the battles between Ninemsn and News Ltd’s online news services – the Murdoch family will control 6.5% and 10% respectively of those two competing businesses.
The same applies to online car ads given that CMH has a controlling interest in Carsales.com.au, which competes vigorously with News Ltd.
The Murdoch press are certainly covering the deal as if it is one of their own and The Australian ’s Nick Tabakoff got the drop on the story yesterday afternoon. Only News Ltd got that nice shot of Lachlan in front of the painting and he chatted to several of the News Ltd journalists, including Terry McCrann who produced a predictable puff piece , albeit one with more detail than anyone else.
The other scandalous part of this deal is the fact that Mark Burrows was Lachlan’s investment banker. Burrows is one of the longest serving directors of Fairfax Media and deputy chairman.
I’ve raised his relationship with rival media moguls at several Fairfax AGMs and Burrows always plays it down. Lo and behold, he then pops up as the adviser in a huge deal between the families of Fairfax’s two biggest competitors.
Fairfax chairman Ron Walker should demand his immediate resignation. Then again, Walker is matey with the Murdoch and Packer camps too, which once again highlights the problem of our two richest families having too much influence over Australia.
Check out the Mayne Report analysis on this deal plus listen to this morning’s interview on 702 ABC Sydney here . And don’t miss this evening’s Today Tonight !