Picture, if you will, the Australian media as a barn dance, populated by flashy, self-entitled moguls and would-be moguls, some of whom have been there forever, some of whom just walked in the door five minutes ago. Hold that picture as you wonder why we saw an outbreak of merger mania reports for the Australian free-to-air TV industry at the weekend. And then ask what’s it all about and does it really matter?

The final question is easiest to answer: the question is no, it’s all media posturing, both in TV and in our battling, beleaguered newspapers, a desperate reach for relevance in these tough days for newspapers, and a desperate play by one struggling media mogul in Lachlan Murdoch, whose family has been attending these dances for generations.

Murdoch is anxious that his weak and expensive (both for him and other billionaire shareholders) media grab for the big time at Ten not be left without a dance partner. He needs time to repair the damage cause by himself, the board and others (like former CEO, James Warburton) to Ten’s ratings, revenue and those of Southern Cross.

But there’s one problem: the DJ, a feisty Victorian bloke called Stephen Conroy, hasn’t started the music playing yet — either because he can’t or he won’t, or some combination of the two. Nothing will happen unless the weak and seemingly terminal Gillard government can get its proposed changes to the media laws, which include removing the current 75% audience maximum, through both houses of Parliament in the seven sitting weeks left before the election.

The Greens have been urging the government to get cracking — they don’t like the current lack of diversity in the media, nor do they like News Limited and the Murdochs. But they’re also keen to prove their estrangement from Gillard and Labor. They won’t be signing up to anything that appears to give the big media companies, and especially the Holt St “hate media”, what they want.

For those of us who’ve been through a few of these media ownership reform efforts, passage thus looks decidedly unlikely. And that means nothing will happen until well after the election. In the meantime, everyone sits around and tries to entertain themselves as best they can.

Thus there’s been plenty of analysis about how Southern Cross and Nine Network would look (never mind the $1.5 billion debt burden a combined company would have to support), and what that could do to Ten. Southern Cross finally confirmed in a statement to the ASX that it was “reviewing a number of options” for the company. But it also reminded everyone that under the current legislative arrangements, “any merger between SCA and the metropolitan TV stations is effectively prohibited”. That’s the most sensible thing that has been written so far on this story.

But who benefits from this story of talks between Southern Cross and Nine being flushed out into the open? The answer is easy: Lachlan Murdoch, who is widely seen as the source by non-Ten people in TV-land (the story first got legs in The Australian), and who this week was wooing independent MP Rob Oakeshott. Ten’s affiliation agreement with Southern Cross Media finishes in June, and Murdoch is keen to avoid being beaten up by Southern Cross Media in any new agreement. Southern Cross people have made no secret of the fact they want a new agreement with Ten on much lower terms, to reflect Ten’s weak ratings and the prospect of those poor figures continuing for the foreseeable future. Any cut in the affiliation fee transfers money from Ten to Southern Cross shareholders (including Macquarie Group with 27%).

“The reports of Southern Cross talking a merger with Nine should be primarily seen in light of the affiliation talks.”

The affiliation agreement can be extended at mutual agreement (and probably will, as Nine’s deal with WIN was extended for a while several years ago until agreement). Southern Cross currently pays more than $70 million a year to Ten (roughly 10% of Ten’s current revenues). It is a set proportion of SCA’s TV revenues, around 30%, from what is whispered in the industry. That is pure profit for Ten. Nine also receives fees from WIN, owned by Bruce Gordon, who is a 14% shareholder in Ten and Seven gets income from Prime TV, 11% owned by Seven which also controls all of its ad revenues in regional Queensland.

The reports of Southern Cross talking a merger with Nine should be primarily seen in light of the affiliation talks. The easiest way to raise concerns, especially among the Greens and the independents, is publicity about a large regional broadcaster in Southern Cross, talking to Nine, a metro and regional operator (NBN) about a merger, with talk of cost savings. Cost savings mean lower spending on news and local programming in the bush, which will upset the Greens and also many National Party members. Rob Oakshott and Tony Windsor are already taking a leaf from Nat Paul Neville’s book and talking about protecting local content.

But, so unattractive is the country’s third FTA commercial network at the moment that if SCA ends up with Nine (in a couple of years), who would want Ten? Murdoch’s the least attractive prospect at the dance. Even worse, if Southern Cross instead pursues a merger with Ten, Murdoch’s stake will be diluted, as will James Packer’s, Bruce Gordon’s and Gina Rinehart’s. It will crystallise those hundreds of millions of dollars in losses in Ten these billionaires currently hold. The least-worst option for Lachlan Murdoch and others is a maintenance of the status quo, with Southern Cross continuing as Ten’s regional affiliate.

What of the other attendees at the dance? While Seven is assumed to want Prime Media, don’t bet on it, despite the market touting stories that Paul Ramsey’s stake in Prime is saleable. Seven enjoys the affiliation fee flow from Prime for regional NSW and Victoria and doesn’t needs to spend hundreds of millions taking control of what is its ‘cream’. Prime is not going anywhere and it knows it, as does Seven and Kerry Stokes.

Then there’s WIN, Nine’s regional affiliate, but also, just to complicate things, the metro affiliate in Adelaide and Perth (both poorly performing stations). Ownership of those would have to be sorted out before WIN or Southern Cross could buy Ten. Bruce Gordon would reject Southern Cross’s approach — it makes more sense for Nine to take him out of WIN. WIN getting into bed with Lachlan Murdoch on an affiliation or merger basis would be problematic. Both Messrs Murdoch and Gordon would have losses on their Ten holdings, and there’s the question of the metro Nine stations in Adelaide and Perth. Could Rinehart buy the Nine stations in Perth and Adelaide to create the groundwork for a deal with Ten or with Nine?

Finally, what happens if Network Ten’s attempts to revamp its schedule doesn’t work and its $45 million net cash pile (probably $100 million or so if debt is forgotten about) is drained and there’s a cash crunch approaching? Who buys and what does the government — either re-elected or new — do about it?

And we still don’t even know when the DJ is going to get things going.