Apr 14, 2011

How Steve Fielding helped billionaires dominate media ownership

Steve Fielding retires from the Senate on June 30, but one of his lasting legacies will be the continuing flow of media deals triggered by John Howard’s liberalisation of foreign and cross-media ownership laws in 2005.

Stephen Mayne — Journalist and Founder

Stephen Mayne

Journalist and Founder

Steve Fielding retires from the Senate on June 30, but one of his lasting legacies will be the continuing flow of media deals triggered by John Howard’s liberalisation of foreign and cross-media ownership laws in 2005. With Austar set to be swallowed by Foxtel, WA News now merged with Seven and Southern Cross Media consuming Austereo, it is worth reflecting on just how far the media landscape has changed since Fielding provided that key vote. Former Fairfax Media chairman Ron Walker lead that company on a debt-funded takeover binge as it bought Rural Press and Southern Cross Broadcasting’s radio assets, wiping out two independent players. Today Fairfax is capitalised at $3 billion, although it somehow claims to have net assets worth $5.3 billion, suggesting new CEO Greg Hywood needs to 'do a Leighton' and take some write-downs. WA News also joined the "no longer independent" club and foreign private equity firms enriched James Packer and Kerry Stokes beyond their wildest dreams, although both partially squandered their windfalls. The media industry globally retains unusually high levels of family ownership and this is especially so in Australia, where billionaires remain as dominant as ever, even after considering the influx of private equity. After factoring in Monday’s WA News vote approving the $4 billion Seven Media Group purchase and Southern Cross Media’s fully committed $471 million capital raising to fund the Austereo acquisition, this is how the 12 most valuable Australian media companies stack up in terms of market capitalisation and billionaire influence:
  1. News Corp:$44 billion; Murdoch family controls through a gerrymander which allows a $6 billion stake to translate into four family members on the 17-person board because 70% of the shares can’t vote.
  2. Telstra: $35 billion; Future Fund now under 5% and no billionaires with influence.
  3. Fairfax Media: $3 billion; Fairfax family has second largest shareholder with 10% and one board seat.
  4. Seven Group Holdings: $2.86 billion; Kerry Stokes owns 67.8% and Westrac is now a dominant asset although pay-TV investment remains.
  5. Seven West Media: $2.4 billion; Seven Group Holdings owns 29.6% which equates to a direct stake for Kerry Stokes of 20%. Kohlberg Kravis Roberts is the second largest shareholder with 13%.
  6. Seek: $2.25 billion; founding Bassat brothers' share is down below 5% and James Packer sold out so register is wide open.
  7. REA Group: $1.78 billion; value of News Ltd's 61% stake has just gone past $1 billion for first time.
  8. Austar: $1.7 billion; John Malone’s Liberty Media owns 55% (worth $935 million), most of which is profit.
  9. Consolidated Media Holdings: $1.6 billion; James Packer privately controls 47% and Kerry Stokes has 23% through Seven Group Holdings.
  10. Ten Network: $1.45 billion; three billionaires plus Lachlan Murdoch are sharing control with 40%.
  11. Carsales.com: $1.21 billion; CVC just sold controlling interest so register now wide open.
  12. Southern Cross Media: $1.2 billion; Macquarie Group is largest shareholder with 25% worth $350 million. They are a seller in time so control is open for any billionaire who wishes to step in.
  13. APN News & Media: $977 million; embattled Irish player Independent Newspapers still hanging on with controlling 30% stake but O’Reilly family influence has waned.
The only big player missing from all this is PBL Media, although private equity firm CVC is still hoping it can float the Nine Network and ACP later this year. Bermuda-based billionaire Bruce Gordon also has a big business in his privately owned WIN Group which owns Channel Nine in Perth and Adelaide, plus several regional affiliates. He also happens to be the largest shareholder in Ten Network Holdings, with a representative on the board despite the conflict. Interestingly, there aren’t too many mid-cap media companies once you move beyond the 12 companies listed above. You could try investing in Macquarie Radio (market cap $89 million) if you fancy some exposure to Alan Jones or Seven regional affiliate Prime Media, which is worth $286 million and controlled by healthcare billionaire Paul Ramsay. After that, you are looking at smaller advertising and marketing plays such as Photon, Hyro, Facilitate and STW Holdings. Billionaires are clearly more attracted to media assets with political influence, which might explain why Carsales and Seek have wide open registers. Online classified advertising has been hugely lucrative for those cutting the lunch of the old newspaper companies but it is neither s-xy, prestigious or powerful for those wanting influence. That said, News Ltd is now enjoying paper profits of about $900 million on its 61% stake in REA Group which more than offsets all the losses from its disastrous MySpace internet adventure. The Murdochs remain the most powerful media family in the Australian market because News Corp owns more than 60% of Australia's newspapers, the third biggest magazine business and has management control of Foxtel. Then you have Lachlan Murdoch who personally owns 50% of radio operator DMG and almost 10% of Ten Network Holdings, where he is making a hash of things as acting CEO. Look no further than the resignation this morning of former Ten CEO Paul Viner, who has clearly had enough of the "buy 10% and get a board seat" billionaires club who now control Australia's third biggest television network.

Free Trial

You've hit members-only content.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions


Leave a comment

24 thoughts on “How Steve Fielding helped billionaires dominate media ownership

  1. JamesH

    Steve Fielding: Putting (billionaire press baron) Families First.

  2. Cuppa

    If you want to help push the ABC to return to its charter, please vote and comment on the petition.


  3. Cuppa

    The evil that men do long outlives their careers. Thanks for nothing, Fielding.

  4. chazzai

    I’m no fan of senator Fielding, but putting the blame on him for a policy that was passed by the Howard government seems a little unfair. There are other MPs who had a bigger part in creating this particular monster.

  5. michael crook

    And now with the ABC having been completely emasculated and taking all of its news from the commercial media there is nothing left in the unbiased mainstream. Only Crikey and Green Left Weekly are there to spread the unspun truth.

  6. david

    @CHAZZAI perhaps you could revisit these words…[it is worth reflecting on just how far the media landscape has changed since Fielding provided that key vote.]…then comment again.

  7. Liz45

    I agree with all comments above. It will be no loss when he leaves the parliament. I blame him along with the rest of his ilk, regardless of what side of the House they sit!
    Where’s the outrage over Murdoch’s ‘invasion’ of peoples privacy? Imagine if another media outlet did the same thing? What if Crikey did it, or Green Left? Wow! I suppose, we needn’t go further than Julian Assange and Wikileaks? Hypocrisy!

    @MICHAEL CROOK – Indeed! I await my Green Left each week. It’s interesting to note the different ‘slant’ on many issues when an independent journlist does some indepth research or better still, goes and lives there for several months as do a few young people in Venezuela for example. So often we just get the US/Pentagon/White House or No 10 Downing St mouth pieces? The ABC show them all the time – I could scream!

  8. shepherdmarilyn

    It’s amazing how much damage the revolting Fielding has caused isn’t it?

  9. shepherdmarilyn

    Did you know Liz that the only time we ever hear Paul McGeough these days is 4 am on Overnights on ABC once a month or so.

  10. Liz45

    Hi Marilyn. No I didn’t. While I frequently listen to Tony Delroy, I’m thankfully asleep then. Paul McGeough writes for the SMH on a regular basis.
    Just what families did Fielding help out any time he voted? It won’t surprise me if he gets a job with one of the group/s he’s ‘helped out’? Not in NSW or nationally I hope! Who’d employ him? He’s also a self confessed ‘media tart’? Likes the limelight! Never hear him pleading on behalf of asylum seekers or their families do we? Perhaps if they were self confessed christians he might?

    Of course we all know, that causing asylum seekers grief or serious mental illnesses is not very important any way – perhaps that’s why Fielding plays ‘doggo’. Incidently, will someone please ask Scott Morrison, if Howard “succeeded” in “turning the boats around”, why did they spend millions building Christmas Island? I’ve given up screaming at the TV?Nobody answers me!

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details