The prospect of Lachlan Murdoch and Jamie Packer joining forces to privately own the rump of the Packer family’s media empire threatens to negate one of the few benefits that emerged from last year’s massive media machinations.
When James Packer decided to bail out of Nine last year by selling half, and then another quarter of PBL to venture capitalists CVC Asia Pacific, there was a glimmer of hope that down the track this could lead to a break up of the media assets and a sell-off to new media players.
This is the way venture capitalists work. They find a cheapish asset, knock it into shape, or cut it to the bone, and then flog it off in whatever way makes them the most money. Occasionally this means breaking up the component parts and selling to several separate bidders.
There's more to Crikey than you think.
Get more and save 50%.
In a country where two companies own virtually all of the nation’s newspapers and now have the right to own TV networks as well, the prospect of several new media players was a glimmer of hope worth clinging to.
But now that looks less likely. As the two scions reunite, brush off their OneTel losses and start trading, the chances of CVC busting up the empire has got to be less likely hasn’t it? Especially if Lachlan and James are at the table when the crucial decisions are made. Surely Lachlan isn’t in this for the relatively modest half of a quarter share that he’d end up with if this $3.3 billion deal comes off.
This deal can be read in so many ways. Firstly it could be seen as just the first gambit in an audacious independent re-entry into the media sector by Lachlan and as such it’s safe to assume that the ambitions extend way beyond the deal we’re now aware of. When it comes time for CVC to sell, Lachlan is well placed to acquire more and more and more, as only the Murdochs can.
Or it can be seen as another play by the Murdoch family in the Australian media and as such just adds to the depressing picture about that family’s media dominance. If you add Lachlan’s likely stake in these assets to those already owned by News Limited, it is an inventory that beggars belief.
But then there’s another way of looking at it again. What happens when Rupert dies and a large share of the News Limited assets pass to Lachlan? Would he have to sell down his holdings to comply with the deregulated media ownership regime installed by the Howard Government – and so far not touched by the Rudd Government? The answer is probably not as the rules allow for a remarkable degree of cross-media ownership and completely exempt magazines and Pay TV which are dominant in the quarter share to be owned by Lachlan and James.
The deal also begs the questions: Why are so few companies interested in stepping into the media sector and why is it that the same old players keep on coming back to running our media? Why doesn’t Wesfarmers or some other conglomerate make a play for the media? The moguls get it too easy and face too little competition.
Or maybe there’s an entirely different way of looking at it. Rather than this being evidence of renewed interest in the media by James Packer, perhaps this is just another way of running down his media holdings even further so as to depart the media altogether in favour of casinos and gaming.