Having worked so hard to block Malcolm Turnbull’s rise to the prime ministership, Rupert Murdoch’s bid to expand his control of the Australian media through Foxtel’s investment in Ten comes at a particularly interesting time. As prime minister, Tony Abbott often looked to help the Murdochs, but as communications minister, Malcolm Turnbull wasn’t in the business of doing any favours. The impasse over the abolition of the 75% reach rule -- along with the rest of Turnbull’s media reforms -- was the best example of personality-driven gridlock over an issue related to the rent-seeking of media billionaires. Despite past hostilities, the Murdoch and Stokes families collaborated to campaign against Turnbull’s media reforms. The removal of Abbott will presumably now open up reforms in media ownership laws, particularly the 75% television reach rule, which prevents takeovers involving regional broadcasters such as Prime Media, Southern Cross Media and Bruce Gordon’s WIN Media. Debt-laden Seven West Media is the logical buyer of Seven affiliate Prime, which is capitalised at about $200 million. Yet Kerry Stokes instead seems intent on blowing hundreds of millions of dollars in the oil industry, and yesterday Seven West Media even launched a $75 million buyback to prop up its tumbling shares, something that will further limit its capacity to buy Prime should the laws change. The most immediate media ownership issue to be resolved is a decision on whether Foxtel should be allowed to buy 15% of Ten Network Holdings and achieve board representation. Monday was a big day in this regard because only hours before Turnbull made his pitch, the ACCC released its “statement of issues” raising serious doubts on the Foxtel deal, and the Australian Communications and Media Authority also released this statement, which included the following:
"The ACMA is currently assessing whether the proposed arrangements between Foxtel and Ten are consistent with the media diversity and control rules prescribed in the Broadcasting Services Act 1992. In doing so, the ACMA is considering, amongst other things, whether as a result of the proposed transaction, any person will be in a position to exercise control of:
  • a commercial radio broadcasting licence; and
  • a commercial television broadcasting licence; and
  • a newspaper, associated with the same radio licence area."
ACCC boss Rod Sims and ACMA chief Chris Chapman effectively sit on each other’s boards, so their tag-team approach on Monday is highly significant. The obvious person who might be in breach is Lachlan Murdoch, who owns 100% of the Nova radio group and is co-chairman of News Corp, which is Australia’s biggest newspaper company and also has management control of Foxtel, along with 100% ownership of Fox Sports. With the National Party also negotiating with Malcolm Turnbull to have a stronger policy push limiting the abuse of market power by big corporate players, it is getting more difficult to see how the Murdoch family will be able to further expand their dominance of the Australian media market. Murdoch family loyalist Terry McCrann predictably attacked the ACCC today with a Herald Sun column headlined “ACCC’s thorough inanity”. McCrann ran the usual lines about technology and competition from new entrants, suggesting it was outrageous the ACCC would observe the following about Foxtel’s investment in Ten: “The proposed acquisitions have the potential to substantially lessen competition for the supply of free-to-air television services in Australia, particularly in the broadcasting of sports content.” What is really amazing is that the ACCC and ACMA sat back and did nothing when Lachlan Murdoch and James Packer, then partners in Foxtel, took control of Ten, and forced it not to even bid to retain the AFL rights in 2010. As was argued in this Crikey piece last Friday, Murdoch family power grabs need to be resisted in Australia. The question is whether Turnbull as prime minister -- along with his new communications minister (Joe Hockey is being mentioned in press reports) -- has the nerve to push back against Pac-Man-like Murdoch expansionism. For instance, if Foxtel is banned from having board representation at Ten, why should News Corp continue to provide programming content to Ten such as The Bolt Report? Things have also gone quiet in recent weeks on the question of News Corp buying Sky News, which would be another affront to the whole notion of media diversity in Australia. Nine Entertainment Company took a $25 million write-down on its 33% Sky News stake in the full-year results (see page 75 of latest accounts), which was widely expected to lead to the sale. However, if Foxtel can’t take a board seat at Ten, why should News Corp be able to move to 100% of Sky News when it currently controls only a fully diluted 14% through BSkyB’s one-third interest? You only have to look at News Corp’s campaign against NRL boss Dave Smith after his NRL deal with Nine to understand the way the Murdochs so brazenly expect politicians and media rivals to yield to their demands. Turnbull has shown he can rise without Murdoch family endorsement. The question now is whether he will use the highest office in the land to actively work against the world’s most powerful family.