Australian Media Shakeup Begins
Wednesday, October 18, 2006; 5:06 AM
SYDNEY, Australia -- Media moguls began intense jockeying for position Wednesday as Australia's Parliament passed new laws on foreign ownership and mergers that foreshadow the biggest shakeup in the industry in decades.
Within hours of the laws being passed, media and gambling company Publishing & Broadcasting Ltd. announced it would sell half its stake in media assets to a private equity consortium for Australian dollars 4.5 billion ($3.4 billion).
And television broadcaster Seven Network Ltd. announced it had bought 8.4 percent of West Australian Newspapers Holdings Ltd., for an estimated A$200 million ($150 million), and wants to increase its stake to 14.9 percent.
The moves coincided with the changes in the media laws, which have been hotly debated in recent months because the industry is heavily concentrated in Australia, with many cities having just one major newspaper.
Critics say the new legislation will further concentrate media ownership in the hands of a few big players, reducing diversity and giving the tycoons undue influence over governments who might be fearful of critical coverage.
Communications Minister Helen Coonan defended the laws Wednesday as making it easier for new investors to enter the industry, and said the explosion of online media was giving readers, viewers and listeners more choice than ever before.
The new laws are the first overhaul of the industry since legislation passed in 1985, leaving Rupert Murdoch, Kerry Packer and a handful of others to emerge as the dominant industry players.
The new laws' key provisions include an end to a bar on foreign companies controlling more than 15 percent of a television company or more than 25 percent of a newspaper publisher.
They also relax bans on newspaper companies owning television stations, and vice versa, in the same city or regional market. Under the new laws, one company can own two of the three main formats _ newspapers, television or radio _ in one market, but not all three.
PBL, which made Kerry Packer into Australia's richest person before he died last year, said Wednesday it would move its media assets into a new company, PBL Media, and that private investor CVC Asia Pacific would buy 50 percent for A$4.5 billion ($3.4 billion; euro2.7 billion).
The assets include television's Nine Network, magazine publisher Australian Consolidated Press and ninemsn.com, an Internet joint venture with Microsoft.
PBL Executive Chairman James Packer, who took over the company from his father, said the billions PBL will get from the deal will fund its expansion into gaming, which include casino developments in Macau.
But speculation was rife Packer could used the cash to bid for Fairfax Newspapers, publisher of The Sydney Morning Herald and The Age, of Melbourne. Kerry Packer made no secret of his desire for Fairfax, though he was prevented by the old cross-media rules from buying them while he owned Nine.
John Alexander, who will become executive chairman of PBL Media, said the deal would allow the company "to take advantage of opportunities in the media sector both in Australia and overseas."
Seven, controlled by tycoon Kerry Stokes, won't be able to increase its stake in Western Australian Newspapers beyond 15 percent until the new laws come into effect early next year.
Unheard from since the laws entered the final parliamentary stages has been Murdoch, whose News Ltd. owns newspapers in every Australian state capital but has previously been banned from owning television stations as well. Murdoch moved the company's base from Australia to New York in 2004.
"Ultimately this is all about providing for consumers," said Coonan, the communications minister. "I'm very confident (the changes) will provide an opportunity for a move to the new digital age and that's ultimately going to mean more services and new services for consumers."
But critics said the laws would lead to fewer owners, less diversity of views in the mainstream press, and a decline in journalists standards due to job cuts and consolidated newsrooms.
"Having fewer media owners, which is the inevitable result of these laws, cannot be good for democracy," said Eric Beecher, a former Fairfax and News Ltd. editor who now runs the online news site Crickey.com.