Silly season reached a sort of climax this weekend, when The Australian announced Kevin Rudd was its Australian of the Year “because of the way he dealt with the global financial crisis.”

That was a bit odd, to put it mildly, to put it as understatedly and blandly as possible.  The national broadsheet spent 2009 attacking the Government’s handling of the GFC, attacking the need for stimulus packages, attacking the actual spending within the packages – to the extent of soliciting and running every half-baked rumour from a P&C in blue-ribbon Liberal electorates – and airing every possible line critical of the Government, from complaining the Budget forecasts were too optimistic to, not long afterward, suggesting growth was so strong it was time to cancel the remaining stimulus components.

In other circumstances, the announcement wouldn’t have been that surprising.  As The Oz pointed out as a sort of pre-emptive defence against calls of bias – who amongst us doesn’t harbour the suspicion that The Oz has sold its soul to the ALP – it has nominated Prime Ministers as Australians of the Year before, even nominating Gough Whitlam, in the halcyon days minutes before it all went wrong.

But given the tirade of anti-Government sermonising and coverage throughout last year, it looks just a tad suspicious.

For the conspiracy-minded, and I know there are one or two of you out there, one might wonder whether News Ltd feels the need to get on the right side of the Prime Minister, having managed to get itself thoroughly offside with him since the 2007 election.  Now, media organisation should get themselves offside with governments, but it should be for the right reasons not, in The Oz’s case, the Right reasons. The now definitely ex-Rudd mate Chris Mitchell and his stridently anti-Labor editorial tone is the primary problem there, although it was the News tabloids, not The Oz, which ran fictional front-page emails at the height of the Godwin Grech business, a confection that made Rudd, to use the beloved phrase, incandescent with rage.

Just to show how relative media coverage can be, however, more than one Coalition source has subsequently complained to me that Steve Lewis has “bent over backwards” to appease the Government ever since the Grech stuff.  As a regular reader of Lewis – whom I rate highly as a journo – I haven’t been able to detect that bias, but there you go.

But a conspiracy theory needs a motive.  The motive would be that News Ltd’s commercial prospects are not, currently, particularly healthy in Australia.  Most of its assets are in the stagnant, if not persistent-vegetative-state newspaper market and subject of the vexed issue of how to charge for online content (parenthetically, it was amusing to see the reaction, or rather non-reaction, when the NYT announced last week it was revisiting online charging  – when the premier liberal media organ says it is establishing a paywall that’s seemingly fine; when Rupert says the same, it’s imperial overreach).

News’s subscription television assets have had a long period of success – sports channel provider Premier Media, which it half-owns with Consolidated Media, has along with Austar been the real success story of Australian subscription television through its control of key subscription sports content.  And Foxtel, 25% of which is owned by News, has now been making solid profit for several years and has completed an impressive digitization project that means it offers the most advanced suite of media products in the country. Kim Williams can rightly claim the mantle of most innovative major media CEO in Australia and, given Foxtel’s numbers when he started, one of the most successful.

Problematically, though, Foxtel’s growth prospects do not appear good.  Subscription growth rates have flattened in the last 18 months – although you can blame the GFC for that – half-owner Telstra is trialling its own IPTV/PVR set-top box and may exit Foxtel under government pressure anyway, and the commercial free-to-airs have stopped fighting multichannelling and discovered it can be successful for them.

Not to mention illegal downloading of a subscription staple, foreign drama, and a little thing called the NBN.  Oh, and the ABC’s free 24-hour news channel obviously has dire implications for Sky News, which News one-third owns.

The only growth opportunity in subscription television lies with deregulation of Australia’s anti-competitive, punitive anti-siphoning regime.  It would also most directly benefit News because of its half-stake in Premier Media Group, which will be the single-greatest beneficiary of any removal of sporting events from the list.

A legislatively-mandated review of anti-siphoning is underway at the moment.  So far, however, the signals from government suggest a predisposition to regulate more, not less, with the review discussion paper targeting online sports coverage, which could soon join RC content as internet material the Government believes Australians need to be protected from whether they like it or not.

More alarmingly, the only exception to this regulatory approach is likely to be the removal, or softening, of the current ban on premiering anti-siphoning events on free-to-air multichannels, which would pose a substantial threat to Premier Media.

While Kevin Rudd has a deep and personal loathing for News Ltd newspapers, that spells bad news for News Ltd hopes of reform in other areas, regardless of the merits of reform.  News Ltd’s position is made worse by what it doesn’t own – a free-to-air network, which is the only type of media outlet governments really worry about, courtesy of the mass audiences evening news bulletins attract.

The horrible reality though is that, even with Steve Bracks leading the charge for the subscription television sector, the chances of meaningful reform of anti-siphoning are so remote as to be non-existent.  Industry executives struggle to understand this.  Most of the ones I’ve dealt with – bright sparks all – think that, if only they could find the right argument, they’d find a way to convince politicians of the merits of their case.  The problem is that they’ve already put the most compelling arguments they can mount – in fact, the argument for removing the anti-siphoning list altogether is a no-brainer – but they aren’t working because no politician of any stripe will take the risk of alienating both sports fans and the free-to-air networks.

If the prognosis for anti-siphoning reform isn’t bad enough, News execs might also be worried about the possibility of the leakage of government advertising away from newspapers to online.  And then there are the advertising dollars available from Labor during an election campaign.  ALP hardheads might wonder about the efficacy of advertising in newspapers which are editorially hostile to them.

In short, there are several reasons to think the usual balance of power between Labor and News Ltd has, however temporarily, tilted in favour of the former.

The alternative to all this of course is that there is no conspiracy.  That, instead, The Australian took an objective look at what has been happening economically over the last 18 months, swallowed its pride and decided that the Government did about as good a job as it could have done in staving off what looked, at one stage, like a new economic dark age.

I’m not sure that makes Kevin Rudd Australian of the Year.  Paul Keating knocked back an offer of an Order of Australia from the Howard Government on the basis that you shouldn’t get such awards simply for doing what you’re paid to do (and just to show how Keating could never win, he got bagged for being “ungracious” when he did it).  I suggest the Keating argument applies just as much in this case.  Kevin Rudd, Wayne Swan, Ken Henry and Glenn Stevens did an excellent job of handling the financial crisis, aided by a great many advisers.  But handling crises is in their job description.

Regardless, let’s give The Oz the benefit of the doubt and acknowledge that it takes guts to admit you were wrong.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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