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The Australian Parliament in October 2006 passed legislation for new media laws that commenced on 4 April 2007. The new laws reform the Broadcasting Services Act 1992 which regulated ownership and control rules for commercial television and radio broadcasting, subscription television broadcasting, international broadcasting, data casting transmitters and newspapers. The purpose of the original Act was to encourage diversity and quality of media services, controlling access to the market and the services that are offered. The new laws, however, lift foreign and cross ownership restrictions on media markets. The ‘two out of three’ rule means that companies will be allowed to own up to two media outlets - television, radio and newspaper - in a single area. Mergers will be allowed only if the transaction passes a media diversity test that ensures there are five remaining independent media groups in metropolitan markets and four in regional markets. Under the new laws, media mergers are subject to the approval of the Australian Competition and Consumer Commission (ACCC).
It is likely that the new media laws will lead to the further concentration of media ownership. This would reduce the number of media owners in Australia, enrich a cabal of present media moguls, and enable them to have two out of three ownership of a newspaper, television and radio station within a single area. This represents a serious threat to democracy. A healthy democracy requires diverse ownership of the mass media in order to ensure that the news is reported in a fair and open manner. According to a 2006 Roy Morgan poll, over 80 per cent of journalists oppose the new media laws on the grounds that it will lower the quality and diversity of news coverage. Seventy-one per cent thought that the changes would give media owners too much influence over the political agenda.
It is argued that the explosion in “new media” will ensure diversity. The top 12 web sites in Australia are, however, dominated by sites owned or co-branded by the major offline media organisations - Nine MSN, Fairfax, Yahoo 7, the ABC and News. The other major sites are non-media sites including Google, Ebay, Qantas and major banks. These 12 sites account for at least 70 per cent of all internet page views.
Australia already has one of the highest concentrations of media ownership
in the developed world. Currently, James Packer’s Publishing and Broadcasting
Ltd (PBL) owns over 51 per cent of the total potential audience of free-to-air
television and has a 25 per cent stake in Foxtel (together with News Corporation
Ltd). PBL also owns almost 50 per cent of the top 30 magazines in circulation
(Communications Update, 2005). News Corporation Limited (US) owns over two
thirds of the daily print media, and together with the Fairfax Group, it
owns just over 89 per cent of the major metropolitan and national daily
newspapers and almost 99 per cent of all Sunday papers (See Table 1). Since
1997, many metropolitan and Sunday papers have been closed.
| Table 1: Newspaper Owners – Summary of Market Share (% Circulation) | ||
| Owner/s | Capital City Mon-Fri | Capital City Sunday |
| MAJOR MEDIA COMPANIES | ||
| News Corp Ltd | 67.8% | 78.1% |
| John Fairfax Holdings Ltd | 21.6% | 20.4% |
| West Australian Newspapers Holdings Ltd | 8.9% | - |
| Rural Press Ltd | 1.6% | 1.1% |
| APN News & Media P/L | - | - |
| Independent Print Media Group P/L (IPMG) | - | - |
| Source: Communications Update, “Media ownership update”, June 2005, Issue 168, Communications Law Centre, pp1-45. | ||
Within days of the new media laws being passed, Packer’s PBL unveiled a $55.5 billion deal to sell a half share of its television and magazine business to Europe-based private equity firm CVC Asia Pacific. This freed up billions of dollars to enable the expansion of PBL’s casino and online media interests. In November 2006, Kerry Stokes, the chairman of Seven Network, made a deal with private equity firm Kohlberg Kravis Roberts (KKR) which freed up as much as $2 billion to expand Stokes’ media interests and make new acquisitions. In January 2007, Canadian media giant CanWest agreed to a $2.5 billion deal to buy Canadian broadcaster Alliance Atlantis Communications, a Toronto-based media company. This means that CanWest, which has a 56.4 per cent holding economic interest in Australia’s in Channel 10 network, may in the future sell its holding in order to finance the purchase of Alliance Atlantis.
Private equity deals make it easier for media giants to make predatory acquisitions, for example, adding major newspapers to television empires. On the 20th of October 2006, amidst the sharemarket frenzy following the introduction of the new media laws, Rupert Murdoch’s News Corporation confirmed its “friendly” 7.5 per cent stake in John Fairfax Holdings in a $360 million “off-market raid”. The purchase gives News Corporation considerable leverage related to takeover bids for Fairfax Media, owners of The Age, The Sydney Morning Herald and The Australian Financial Review. During the same period, Seven Network paid close to $200 million on the sharemarket to build a 14.9 per cent share in West Australian Newspapers, the owners of Perth’s only daily newspaper. In April 2007, a $9 billion merger between Fairfax Media and Rural Press came into effect. In February 2007, PBL entered into a deal to buy Channel Nine Perth from Sunraysia Television Ltd for $136.4 million. Although media mergers are subject to the approval by the ACCC, new legislative changes to the Trade Practices Act 1974 have been passed by the Senate that curb the ACCC’s powers to stop anti-competitive mergers. The proposed amendment will restrict the ACCC process to 40 days after which the process will be taken to the Australian Competition Tribunal. The Tribunal has been criticised as largely ineffectual in stopping the concentration of media ownership, making it much easier for companies to merge.
Greater concentration of ownership is likely to consolidate the power of media giants, strengthen their influence on government policy and public opinion, and weaken the impact of investigative journalism and its ability to scrutinise the decisions of those in power. The possibility of increased media ownership is the more serious because of attacks on and reduced funding for the ABC. The relaxation of cross-media ownership will also have an impact on rural and local news if dual control of broadcast and print is enabled in each market. According to the New Matilda: “No democracy can be sustained without diverse and dissenting voices. The government must encourage media diversity through lowering the entry barriers for new players, reviewing existing licenses, and placing funding for public broadcasting on a secure footing”.
To date, the Rudd Government has made no changes to these arrangements.
Australian Government, “Meeting the digital challenge: Reforming
Australia’s media in the digital age”. Discussion paper on media
reform options,
http://www.dcita.gov.au/__data/assets/pdf_file/37572/Media_consultation_paper_Final_.pdf
Communications Update, “Media ownership update”, June 2005, Issue 168, Communications Law Centre, pp.1-45.
Morgan, F. (2005). “Up, up & away in my beautiful balloon: Some questions of media policy”, http://arts.anu.edu.au/democraticaudit/papers/200509_morgan_media_own.pdf
Yencken, D., & Porter, L. (2001). A Just and Sustainable Australia, The Australian Council of Social Service (ACOSS), Melbourne.
