Falloon hopeful of media reform

Sydney Morning Herald | Dominic White | 9 November 2015

Fairfax Media's new chairman, Nick Falloon, hopes outdated media laws will finally be abolished by the federal government, saying the move would correct an "imperfect market" in which unregulated overseas players have a "complete free hand".

In his first interview since taking over in September, Mr Falloon also said he was disappointed the Australian Competition and Consumer Commission last month approved a 15 per cent equity investment in Ten Network Holdings by Foxtel, the pay TV giant half-owned by Fairfax's closest rival, News Corp.

Communications Minister Mitch Fifield is preparing to take proposals to cabinet to abolish the reach rule, which prevents mergers between metropolitan and regional television networks, and possibly the two-out of-three rule, which stops a group owning more than two of a newspaper, commercial TV licence or radio licence in a large market.

Sources believe the government will move soon after cabinet meets in the week beginning November 23, with the reach rule primed to go but the immediate fate of the two-out-of-three rule less clear. Some believe television licences will be halved next year and there may be a minor reduction to the anti-siphoning list of sports guaranteed for free-to-air television.

If legislative amendments to the ownership rules are voted through in Parliament, it is likely to spark rapid consolidation among traditional media players, which are battling heightened competition for audiences from the likes of Google, Facebook and Netflix.

"I get the impression that [the government] would like to [make media reforms] and they are looking at it very positively, and I get the impression that there is a more broad consensus among the media players for it happen than maybe there was a few weeks back," said Mr Falloon, who chaired the company's annual general meeting in Sydney last week.

"So we are hopeful that that will finally happen because quite frankly, it's been talked about for a long time."

Mr Falloon was executive chairman of Network Ten for nine years until 2010, and his move to Fairfax marked his first major return to media since then.

"I go back to when I was last involved and it seems like while the industry's changed along the path, the conversation hasn't changed in all that time," he said.

"So I'm hopeful and he [Senator Fifield] seems to be wanting to do it. However Parliament deals with it is a matter for others."

Mr Falloon's predecessor, Roger Corbett, was enthusiastic about the potential synergies of combined print, digital and television newsrooms that could be on offer if Fairfax combined with a free-to-air television network owner such as Nine Entertainment Co or Seven West Media.

However, some on the Fairfax board are less enthusiastic about such a prospect at a time when television faces digital disruption similar to that experienced by Fairfax's own print assets during the past decade.

Mr Falloon declined to comment on what deals Fairfax might be able to do if the two-out-three rule goes, saying: "We don't have any specific plans but we think until those rules are changed you'll never find out what may or may not be possible."

He added: "It's about removing rules that are so outdated so that the market can find its equilibrium because at the moment you've got all the overseas companies coming in here with a complete free hand to do whatever they like, so you've got an imperfect market."

The bosses of regional television networks Prime Media, Southern Cross Media and WIN Corp will return to Canberra this week to continue their lobbying campaign for media reform with regional MPs.

Fairfax, which owns The Australian Financial Review, The Sydney Morning Herald and The Age, argued that Foxtel's move on Ten would damage competition in sports rights markets. However, the ACCC waved the deal through last month.

Mr Falloon said the deal was "inevitable given the financial position Ten finally got themselves into" but added: "We were disappointed the ACCC didn't have more of a say in that."

Read more: http://www.smh.com.au/business/media-and-marketing/falloon-hopeful-of-media-reform-20151105-gkrn7e.html#ixzz3rEUWACNL