Roger: Over and out - with a parting shot

The Sydney Morning Herald | Elizabeth Knight | August 31 2015 

Fairfax Media chairman, Roger Corbett has thrown a parting grenade at what he describes as the outdated media ownership laws in Australia, at Rupert Murdoch's News Corp for flouting the current laws and at the policy vacuum in Canberra that is retarding moves to remove them.

Corbett is particularly critical of the current media ownership laws that prohibit a media group from owning more than two of three species of media assets in the same market - either print, radio or television.

In the more seamless digital world that is removing the traditional distinctions between the various forms of media and allowing new entrants into the market, Corbett believes Fairfax and others are being hamstrung by the old rules.

He says that the proposal by News Corp's 50 per cent-owned pay television group, Foxtel, to take a 14.9 per cent stake in Ten Network circumvents these rules because Foxtel is a broadcaster, News is a major player in print and Rupert's son Lachlan owns radio assets - all in the same markets.

The proposal is now before the competition regulator the Australian Competition and Consumer Commission, which a few years ago denied Kerry Stokes the opportunity to buy into Foxtel because he already controlled the Seven Network.

But in the media industry the battle lines have been drawn between those groups lobbying for change - chief among them Fairfax and Nine Entertainment - and those such as Murdoch and Stokes who prefer the status quo.

Dozen Years Done

After 12 years as a director of Fairfax and having seen mistakes, triumphs and controversy within the company, Corbett used his final hours in the chairman's role to air his view that Murdoch may have "completely gotten around the media rules and he's been able to do so because of the political situation that we are currently in".

Corbett is unwilling to sheet home the blame directly or at least solely to Prime Minister Tony Abbott. Instead he says the culprit is a lack of support from a hostile senate.  He notes meanwhile, that minister for communications Malcolm Turnbull has publicly recognised that the media rules should change.

"I think the prime minister's position is that he is not going to start a campaign to change any media rules if he can't succeed in getting it through the senate and clearly the Labor Party support is necessary for that to occur and for whatever reason the Labor  Party is not choosing to give that bi-partisan support,' Corbett said.

"It fascinates me enormously because if the Labor Party have got a media enemy at the moment, it's Murdoch and here they are giving Murdoch one hell of a step up."

Fairfax Media has told the competition watchdog that Foxtel's proposed acquisition of 15 per cent of Ten Network Holdings will result in control of the broadcaster by Foxtel and News Corporation - and through that control, of bidding for premium sports content in Australia.

In a detailed submission lodged with the ACCC last month, Fairfax is believed to argue that News and its pay television joint venture will both have a strong incentive to partner with Ten on joint bids only for premium sports content because News and Foxtel will have the ability to control Ten and a financial interest in its success due to Foxtel's $77 million investment.

The concerns of Fairfax, which owns BusinessDay, are echoed by Nine Entertainment Co, which has lodged its own submission arguing that the transaction should be opposed by the ACCC on competition grounds, it is understood.

Corbett says he looks with a degree of cynicism at Rupert Murdoch and Kerry Stokes sitting in the same room making the announcement of a joint Foxtel and Seven bid for the AFL broadcast rights.

Abbott 'Can't Govern'

Meanwhile Corbett, who is a director of the Reserve Bank of Australia, says Abbott is in a position where he can't govern. He joins other business leaders in the view that Australia is falling well behind in reform and productivity is being sacrificed.

"We've got a reform holiday because we have got a government that, whilst it's got a mandate in the house of representatives, the electorate has not given it a mandate in the senate," he said

In response to the suggestion that Mr Abbott may be disinclined or afraid to disagree with Murdoch and Stokes, Corbett admitted, "If I was prime minister I would be reluctant to do anything that didn't support the paper (News Corp press) that was supporting me.

"But he is not elected to do that. He is elected to make decisions that are in the best interests of the population of Australia and very clearly the media rules are absolutely totally redundant and as his own minister [communications minister Malcolm Turnbull[ says we should move to change them."

The ACCC is scheduled to make a preliminary finding in a couple of weeks and will provide some indication on whether the Murdoch position has been convincing enough.

"I don't think you could ever underestimate the determination of Rupert Murdoch to do something that's in his interest at every level … that's his history and [as] he is well into his 80s he's been doing it for about 70 years. I think he has developed some skill in the area," Corbett said.

View the article on the Sydney Morning Herald.