The Packer-Murdoch buy-in of the Ten Network will cause little reduction in media diversity in individual markets but exacerbate a steady diminution in the plurality of voices in our national media.
Crikey has gone through the capital city markets affected by Lachlan Murdoch’s decision to join James Packer on the board of Ten via a half-share in Packer’s 18% stake in the free-to-air network. In addition to the Ten stake and board position, Murdoch controls 9% of regional TV broadcaster Prime (but has recently quit the board), 50% of radio network DMG, and is a director of News Ltd, which in addition to its newspapers controls (like James Packer) 25% of Foxtel and 50% of Fox Sports.
For the purposes of cross-media law, only Murdoch’s DMG stake amounts to a clear case of “control”, being more than 15%, but his clear acting in concert with Packer at Ten is likely to be considered control given the size of the stake they would jointly control, and Murdoch clearly felt his role as deputy chairman at Prime was incompatible with a role at Ten (between Prime and Ten, Murdoch would have been in control of television networks reaching more than three-quarters of the national audience, a breach of the 75% reach prohibition).
As a director of News Ltd and an heir to the Rupert Murdoch empire, there’s a case for Murdoch being considered in “control” of News Ltd as well, but under current media ownership rules it’s unlikely to be sufficient for ACMA to establish any breach in those markets where Murdoch would control a radio licence, a TV licence and a News Ltd newspaper, a breach of the “2 out of 3” rule.
As James Packer controlled no registered media groups until he bought into Ten, his acquisition has no impact vis-à-vis the media ownership requirements.
Ten operates in every state capital. Murdoch’s DMG has a presence in all the mainland state capitals, although it’s only in Perth courtesy of a joint venture with ARN. This means Murdoch’s arrival at Ten will reduce the number of registered media groups under the cross-media rules by one in each mainland state capital (a registered media group is anyone who controls either a single, or groups of, radio licences, TV licences and large newspapers, and there must be five registered media groups in each mainland state capital).
In Perth, Murdoch reduces the number of groups to from seven to six (Austereo, Fairfax Radio, Kerry Stokes via 7 and the West Australian, Bruce Gordon’s WIN — Gordon has a substantial chunk of Ten and may act in concert with Packer and Murdoch, but does not currently qualify as a controller — Ten/DMG and its JV with ARN, and Grant Broadcasters). This means only one more cross-media deal in Perth is possible before the limit of five is reached. The same applies in Adelaide, where the number of groups will fall from seven to six. In Brisbane, nine groups will become eight. In Melbourne, 10 groups will become nine and in Sydney 11 groups will become 10 (in Hobart, neither DMG nor Ten operates).
Even assuming Murdoch could be considered in “control” of News Ltd, it would only reduce the number of groups by a further one in Adelaide, Brisbane, Sydney and Melbourne (News isn’t a registered media group in Perth).
That’s all under the existing media ownership rules under the Broadcasting Services Act. The ACCC, which implements competition rules under the Trade Practices Act, will have its own views on the impact of the Packer-Murdoch acquisition on individual markets (for example, for television advertising, where Foxtel and Ten operate in the same market, or sports rights, where Fox Sports and Ten operate in the same market).
In terms of media diversity, the current laws have two significant definitional problems (before you get to issues such as whether five voices is enough diversity). One is that they treat all “voices” as the same, so that horse racing broadcaster 2KY in Sydney has the same status as the Sydney Morning Herald (a new owner could, of course, turn 2KY into a powerful news broadcaster, so removing that licence from the register of media groups wouldn’t work, but as it stands it’s absurd). The other is that they are structured around our archaic licence area-based broadcasting regulatory system, which regulates broadcasters based on how far transmission towers can send radio signals. Because there’s no “national” licence area for traditional broadcasters, there’s no concept of national media diversity. So The Australian and The Australian Financial Review don’t count in any licence area because their circulation is national, regardless of their influence. Similarly Foxtel (and regional subscription TV broadcaster Austar) aren’t included either.
If there was a meaningful “register of media groups” at a national level it would comprise News Ltd via The Oz and its capital city tabloids, Fairfax via its Sydney and Melbourne broadsheets and radio network (and, perhaps, its news websites in Brisbane and Perth), the Seven, Nine and Ten and WIN networks and Foxtel. Whether you’d include Austereo, ARN and DMG depends on how much you think predominantly music-based radio networks contribute to diversity of views (the John Singleton/Alan Jones Macquarie Radio only operates in Sydney and Melbourne and is performing badly in the latter).
The problem is, Foxtel doesn’t count because it is controlled by Packer and News Ltd (Kerry Stokes has a substantial slice now as well via Consolidated Media Holdings), and its main news content, Sky News, is controlled by Seven, Nine and News Ltd via BSkyB. Bruce Gordon owns WIN and also has a substantial chunk of Ten, even if not enough to trigger the ownership limits. Factor in James Murdoch’s ongoing role in News Ltd and the unlikelihood of his acting contrary to the interests of that company anyway given he is one of the heirs of Rupert Murdoch, and our national media diversity starts to look decidedly thin.
In fact, our national media diversity comes down to the Murdochs, Kerry Stokes, James Packer, the Gordons, the private equity-controlled Nine and Fairfax. And the first four of those are already acting in concert in various permutations across free-to-air and subscription television. The Packer-Murdoch deal at Ten further tightens this media oligopoly.
This article originally appeared without the following disclosure, due to the author’s error:
Bernard Keane worked in broadcasting policy in the Department of Communications from 2000-08