There’s not much more stimulating in life than taking on a billionaire media mogul at a public company annual meeting, so we’re really looking forward to this afternoon’s Sydney showdown with Seven Network Ltd executive chairman Kerry Stokes.

There is a smorgasbord of issues to choose from but here are just some possible questions:

  1. How much debt are you carrying on your 93 million Seven Network shares, Mr Chairman?
  2. The audited accounts claim Seven is worth almost $9 a share, yet the market says $5.61. Surely it is time to write down the equity in that over-leveraged KKR private equity joint venture, especially after James Packer walked away from the similarly structured PBL Media.
  3. Who do we owe that $2.5 billion to and how close is the KKR joint venture to breaching its debt covenants?
  4. What the hell are we doing building up a 5% stake in James Packer’s media rump, CMH. How much have we blown on that one?
  5. We all know the chairman is a Perth boy but does that mean we had to blow more than $200 million becoming the biggest shareholder in WA News?
  6. Why did CEO David Leckie sell 1.5 million Seven shares last year and how’s his health after that induced coma scare a few months back?

The Packer and Murdoch families have revealed they are both conservatively geared in their private and public empires, which is what will make this week’s Seven and Fairfax AGMs extra interesting because both Kerry Stokes and John B Fairfax are saddled with worrying debts in some parts of their empires.

The Fairfax situation is most dire because John B Fairfax has a big margin loan after buying out his siblings last financial year and Fairfax Media itself is struggling along with $2.5 billion in debt after the Ron Walker and David Kirk takeover binge.

Whilst the market now values Fairfax Media at just $2.9 billion, the board and auditor Chris George still claim it is worth $5 billion. That $2.1 billion discrepancy will be a first order issue at Thursday’s AGM in Melbourne as it really is time the board faced up to reality and wrote down the value of its mastheads such as The Age and The SMH.


*ABC TV’s Talking Heads program goes up against Today Tonight and A Current Affair at 6.30pm every Monday night. This evening’s episode is described as follows on the Talking Heads website: As founder of the online news site Crikey, Stephen Mayne stepped on the toes of the rich and powerful. Now he’s a web publisher and a committed share market activist — still intent on making his mark. In an emotional interview with Peter Thompson he tells of how he developed his firm sense of right and wrong.

Peter Fray

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