Before the 2013 election, we looked at Rupert Murdoch’s wish list for the Abbott government to attend to. With this week’s financial emasculation of the ABC (and SBS as collateral damage), Abbott and his Communications Minister Malcolm Turnbull are well on the way to meeting the bill from Murdoch, urged on by News Corp’s cheerleaders — led by the biggest loss-maker and most heavily subsidised newspaper in the country, The Australian.
First on the list was anti-siphoning. That’s still on the backburner, and given the government’s now disastrous political fortunes, that’s unlikely to change given the capacity of the free-to-air TV cartel to run a campaign centred on Aussies losing their TV sport. We also suggested there might be a return of government job advertising to newspapers, but we haven’t seen that happening to any great degree. The internet increasingly dominates employment advertising, and newspapers’ share of that is now negligible, according to the monthly ANZ job ads survey.
But the two wish list items where this government has made considerable progress for the Murdochs and News is the coming deal to bail out the ailing Ten Network (in which Lachlan Murdoch has an 8.4% stake and was formerly chairman, and before that chairman and CEO). Rupert Murdoch confirmed at News Corp’s annual meeting last week that News’ independent directors were getting legal advice on News’ involvement in Ten via Foxtel, 50% owned by News Corp. Lachlan Murdoch, more than anyone else, is responsible for Ten’s collapse in the rating and revenues. But News Corp needs government help, as Foxtel’s role will require a regulatory change: in 2012, the Australian Competition and Consumer Commission ruled against Kerry Stokes grabbing control of a stake in Foxtel (25%) held by the then-listed company Consolidated Media (the Packer-controlled company that holds of around 8.4% of Ten’s shares). Watch for News Corp’s shills to start pressuring the ACCC and its chairman, Rod Sims, to abandon that 2012 ruling.
Such a union would also need the tick of the Australian Communications and Media Authority. Foxtel’s stake is expected to be kept below the key threshold of 15% of Ten, but even so under the Broadcasting Services Act it would still be open to ACMA to find that Foxtel, and therefore News Corp, is one of the controllers of Ten, given the strong programming links between Ten and News Corp in addition to 14.9% direct ownership. Ten’s major program supplier (think MasterChef Australia, for example) is Shine Australia, owned by 21st Century Fox at the moment, but being put into a joint venture from January 1 that will be still 50% owned by Fox, which of course is controlled by the Murdoch clan. Foxtel’s Richard Freudenstein is understood to have already lobbied ACMA chairman Chris Chapman about the pending deal. If ACMA doesn’t co-operate in ticking the deal, it will also come under pressure from the attack dogs to stay out of the way. And if Foxtel and Discovery do get control of Ten, watch then for the anti-siphoning rules to come under serious pressure.
“In what has been a disastrous year for Abbott, one of his few successes has been the way he has made Turnbull get down in the filth and mud of the government’s communications policies.”
Then there’s the annual licence fees (4.5% of revenue) of the free-to-air TV cartel, which will now come under pressure because the cartel is deeply unhappy at SBS being allowed to increase its advertising, which will siphon $25 million in ad revenue away from the commercial broadcasters to make up for Turnbull’s slashing of the SBS budget. The cartel still carries enormous political clout, and even more so when governments are struggling politically. Moreover, Ten and the other broadcasters are under renewed pressure from rising competition (Netflix is coming) and static or weakening revenues, so watch for a deal to further cut the remaining 4.5% of revenue licence fees.
And of course there was the curbing of the ABC. The government has gone a long way to fulfilling the Murdochs’ hopes here: the national broadcaster’s international television service contract has been cancelled, though there’s unlikely to be a commercial replacement any time soon given the state of the budget. And $250 million will be ripped out of the ABC budget, with the government yelling loudly that the ABC can absorb the cut without affecting programming. Apart from sheer political cant, that insistence that the ABC doesn’t have to axe programming also points to how the government is implementing the Murdoch agenda: above all, they want the ABC to vacate the digital space that it has so successfully moved into — to curb or start charging for the highly successful iView, which competes with Foxtel, and reduce its free online news presence, which competes with News Corp’s digital sites that charge for access. If along the way the ABC makes fewer programs that beat Ten’s schedule and cuts resources to ABC News 24, which competes with Murdoch godchild Sky News, all the better.
One more thing: in what has been a disastrous year for Abbott, one of his few successes has been the way he has made Turnbull get down in the filth and mud of the government’s communications policies. It is Turnbull who has had to lead the way on breaking the Coalition’s promise not to cut the ABC and SBS — and what a ridiculous explanation he devised to justify it, that savings are different from cuts. It is Turnbull who introduced the government’s mass surveillance bill after being so publicly hostile to data retention in opposition. It is Turnbull who, with Attorney-General George Brandis, is doing the bidding of the copyright cartel.
For the first year or so of this government, Turnbull tried to float above it all, dissociating himself from the unfolding disasters, publicly declaring he wasn’t even being consulted about decisions in his own portfolio, a man in this politically inept government but not of it. Well, that’s over now. Abbott has made sure Turnbull has been pulled down into it along with everyone else.