The Australian’s media commentator Mark Day scored a big scoop today on the ongoing bureaucratic support for Sky News to replace the ABC as the vehicle for the Australian Television contract. He also did a terrific job in attempting to put some distance between the Murdoch family and Sky News.

However, it should be noted that Rupert Murdoch’s top Australian executive for the past 11 years is John Hartigan, the executive chairman of News Ltd. As part of that role, Hartigan serves as chairman of Sky News, the equal three-way joint venture between BSkyB (chaired by James Murdoch), Seven and Nine.

Foxtel is in the same building as Sky News in Sydney’s Macquarie Park and News Ltd has direct management control of Foxtel through its unfettered right to hire and fire the CEO. So when Kim Williams eventually decides to leave Foxtel, it will be Rupert Murdoch who ultimately signs off on his replacement, regardless of what fellow shareholders Telstra and Consolidated Media Holdings think.

The Australian’s veteran media commentator has also been mates with Hartigan for decades. They used to own a farm together.

Unfortunately, Hartigan’s position as chair of Sky News and Day’s friendship with Hartigan wasn’t mentioned in Day’s scoop  today about the 4-0 panel vote in favour of Sky News being awarded the $223 million Australia Network contract. Instead, Day somehow managed to equate concern about power abuses by the Murdoch family and unethical conduct such as phone hacking to Kerry Stokes having investments in China. This is what he wrote about the tender delays:

“It may have been a propitious time for anti-Murdoch arguments but they don’t stand close scrutiny. News Corporation owns a third of a third of Sky News Australia through BSkyB in Britain. It is managed independently of News. You could just as easily make a case for concern regarding the potential commercial ties between the various arms of part-owner Channel Seven. Kerry Stokes’s Seven West Media owns the Caterpillar heavy earthmoving equipment franchise in China through WesTrac.”

What a load of rubbish.

The principle argument against Sky News winning the contract is that the Murdoch family is unethical and they already have excessive dominance over the Australian media market. Therefore, any further extension of this power and dominance ought to be avoided.

I experienced News Ltd’s influence over Sky News directly after Herald & Weekly Times managing director Peter Blunden apparently expressed concern over me entering the Herald Sun newsroom to appear on Sky.

In order to comply with my contra obligations to receive three free Foxtel connections at home, I now have to pay my own way to appear regularly in the Sydney studio on Business View, a one-hour review of the week in business on Sky News Business every Friday afternoon.

This was never the case when Sky News was based out of Channel Nine’s Richmond studio — an arrangement that ended last year when Sky and News Ltd set up several co-located operations across Australia.

In terms of expanding Murdoch family power in Australia, the two other live issues at the moment relate to Lachlan Murdoch’s management control over Network Ten and Foxtel’s proposed takeover of Austar to create an Australian pay-TV monopoly.

I’ve received word from inside Network Ten that some of the external consultants Lachlan has brought into the struggling business will continue on after James Warburton takes over as CEO on January 1 next year.

The key question here is why should any non-executive director be entitled to have their own consultants sitting at the management table?

Some executives have already received external advice about the sort of sensitive information about Ten’s operations, which should be provided to Lachlan and his hand-picked consultants. This is because there are obvious conflicts of interest given that Ten competes vigorously against Foxtel, Sky and Fox Sports when it comes to news and sports broadcasting. Lachlan is a News Corp director and heir to a $1 billion-plus stake in the company after his father dies.

There may well be an internal investigation over the leaking of such concerns from Ten’s Pyrmont bunker to Crikey, just as there should be an investigation into the leaking of key elements of the Australia Network tender to Mark Day.

The Lachlan Murdoch situation will also make for a very interesting discussion at the Network Ten AGM in Sydney on December 9, just as the use and abuse of power by Rupert Murdoch will be keenly discussed at News Corp’s AGM in Los Angeles on Friday.

Peter Fray

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