James Packer, Lachlan Murdoch, Kerry Stokes, John Singleton and Gina Rinehart. While Stokes and Singleton have been around media traps for a few years now, the return of a Packer, a Murdoch and the addition of Rinehart represents a changing of the guard for Australian media dynasties.
But this will not necessarily mean a return to a past where empires and family fortunes are entirely entwined. Perhaps, ironically, it signals the end of the dynastic age and the emergence of new corporate battles for control of media assets.
Much attention has been focused this week on Australia’s richest woman, Gina Rinehart. Her play for Fairfax Media assets and her well-known disdain for “communist” journalists are a potent mix in these post-News Of The World days.
There has been speculation and rumour about her motives, none of it substantiated, but all interesting.
I particularly like Stephen Maynes’ theory that Rinehart’s decision to raid into Fairfax was an act of hubris and rage at the unsympathetic portrait by Jane Cadzow in Good Weekend (published by Fairfax). From published accounts this seems a typical Rinehart approach to solving a problem.
Others raise the possibility that Rinehart and Singleton will now join forces to create a super network of right wing shock-jockery to campaign against Labor in the 2013 election. This is an attractive theory that aligns well with the suggestion Rinehart is a fierce warrior for conservative forces in Australia. It would be easy to do as Fairfax radio assets have been in play and Singleton’s Macquarie Network is a keen buyer.
Then there’s my favourite theory: Rinehart will grab the Fairfax papers, leaving the rest of the company behind. She will gut the current communistic news staff and hire a bunch of young Liberal communications majors; thus turning the SMH and the Age into simulacra of The Australian’s right-wing bile factory.
All equally attractive propositions to Rinehart’s lovers and haters alike. There’s no doubt her actions have polarized the media landscape and created turmoil in the already fragile media asset market.
This is an exciting spectacle and it has generated a great deal of imagining about the future of Fairfax Media, the Ten network, and many of the other major media players. Fairfax may yet be broken up under Rinehart’s assault on its share register; but it is not the only media company facing an uncertain future.
Let’s not forget, for example, that Nine has some rather big bills falling due and creditors are in no mood to take a bath on this expensive-to-run white elephant. Nine’s troubles began when James Packer sold out of the company to concentrate on casinos, now the equity capitalists are wondering who might bail them out.
Kerry Packer is gone; Rupert is hardly here anymore, and no one much under 40 would know the connection between David Syme, Warwick Fairfax and dried up rivers of gold. It seems the new media saviours may yet be riding out of the rusted West, in the larger-than-life form of Rinehart and her posse of cashed-up angry miners.
It’s not quite the Eureka Stockade, but we should perhaps not underestimate the resentment in conservative circles at the perceived sins of the liberal media dominated by the elites on the eastern seaboard.
Moguls in the making?
She’s already “princess of the Pilbara”, but does Gina Rinehart also hold ambitions to become the “princess of print”?
Some think she does, others believe her actions are purely financial. Rinehart hasn’t said anything yet, but the company she keeps only adds to the speculation.
Rinehart already shares the Ten Holdings board table with Lachlan Murdoch (he owns nearly 9% of Ten). Murdoch is also on the board of News Corp, Fox and Sky. He will have some of his father’s fortune to play with one day and could have ambitions to build his own media empire in Australia
Rinehart is also well acquainted with Australia’s last remaining old-style media boss, Kerry Stokes who runs the Seven Network and was also a shareholder in Ten until a few days ago (apparently). Stokes is a fellow Western Australian and could offer Rinehart valuable media advice.
Are we looking at a new set of moguls gathering force here? It seems eerily like the children of a top Chinese cadre following in the footsteps of the father.
Dynasty – now in re-runs
The old media dynsasties are crumbling: many grand families who once owned the great American newspapers are reduced to ghostly collections and fading memories. Berlusconi may yet go to jail and the Russian oligarchy looks nervously down the Nevsky prospekt in St Petersburg. The current reigning global mogul, Rupert Murdoch is, metaphorically at least, on his last legs.
Packer was the last family name associated with Nine and even though Fairfax Media bears the name of the founding fathers, there is currently no Fairfax representation on the board and the substantial Fairfax family holding was sold out a few months ago.
Can we now suggest that the age of the media family dynasty may finally be over? Is the old family ties relationship between the media and owners being replaced by hard-nosed corporate types who have no sentimental attachment to news or entertainment?
Who’s who in Fairfax
In the context of the Rinehart putsch it is interesting to look at some other Fairfax board figures; as their public resistance may prove difficult to overcome.
The board is chaired by Roger Corbett AO. He is the former CEO/managing director of Woolies, which means has a past involvement with pokies. He’s a major shareholder in a shale gas operation in the US, and opposes Rinehart on the mining tax.
Greg Hywood is the Chief Executive Officer and Managing Director of Fairfax. He recently gave the 2011 A N Smith lecture in which he defended journalistic integrity at Fairfax and didn’t mention the cost-cutting he’s carried out which has resulted in more than 500 news-related jobs disappearing over the past couple of years.
Hywood may claim Rinehart’s politics are an anathema to his, but he is grimly aware of the many problems at Fairfax and could probably work with her. In December last year Hywood told The Australian he was not interested in “big hairy takeovers”, but would work to restructure the company and trade out of difficulties (such as the $390 million loss in 2010).
Sam Morgan is the Kiwi wunderkind who founded TradeMe and sold it to Fairfax for NZ$700million in 2006. He doesn’t have a media background, but if Fairfax is restructured or broken up, he might be in the market for the New Zealand operations.
Linda Nicholls AO, is another professional director and it has been suggested she and Sandra McPhee would support a spot on the board for another woman.
More potent at the moment is the opposition coming from other institutional investors and figures not on the board. Orbis Australia fund manager Simon Marais was pretty scathing of Rinehart and her reasons for wanting to join the Fairfax Board (if that’s what she wants to do).
He told The Australian that Rinehart’s seat on the board is not guaranteed and that he would need to be convinced it would be in the interests of shareholders. Marais also strongly defended the independence of Fairfax journalists; not something Gina Rinehart will be keen to hear much of in coming weeks.
Mining for media influence
Gina Rinehart has a lot to learn about being a media mogul. If she aspires to wield the influence of generations of Packers and Murdochs before her, she has a long way to go.
Her father’s brief foray into newspapers 50 years ago is not going to be enough training for this more difficult assignment.
Rinehart is now the biggest individual shareholder in Fairfax Media, just ahead of the Commonwealth Bank with 12.37% and in front of the next seven biggest institutional investors.
We will know soon if she is going to be a dynasty builder, or just a corporate raider.
But it’s interesting that another mining behemoth has echoed Rinehart’s sentiments about the quality of Fairfax journalism. Clive Palmer told Lateline this week that he would consider buying some Fairfax stock himself and really give the place a shake-up.
“Fairfax looks very exciting,” Mr Palmer said. “You could have an east-west play with Fairfax. Gina could come from the west and buy 15%, and we could buy 30% from the eastern side of Australia and really get the place humming again.”
It seems the members of the Fairfax board may well have to make some more room at the boardroom table for a new generation of mogul-magnates ready to dig up the media landscape.