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Media analtysts speculate on possibility of mergers after Minister announces options for changing media laws.

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Wednesday 15 March 2006

Media analtysts speculate on possibility of mergers after Minister announces options for changing media laws


MARK COLVIN: The big media players - N ews Corporation, Fairfax and PBL - are remaining fairly tight-lipped after yesterday's release of the Government's options for changing the country's media laws. 


But the financial markets are abuzz with talks of mergers among the smaller players in regional markets. 


The focus of discussion is on Southern Cross Broadcasting or Prime Television being possible targets for takeover by larger organisations. 


From Canberra, Chief Political Correspondent Catherine McGrath reports. 


CATHERINE MCGRATH: The big players are watching carefully and for the moment quietly, after all, with no legislation to see and a one month discussion period available, there's no point in them telegraphing their plans.  


Rupert Murdoch at the last AGM said he wasn't interested in buying Australian television stations, but that doesn't mean never, and with James Packer at the helm, the general view is that Channel Nine is becoming less and less a part of the PBL business structure. 


It's in the regional markets that the talk of mergers is going on.  


Independent media analyst Scott Maddock says smaller operators are vulnerable. 


SCOTT MADDOCK: They are, chiefly in this case, Southern Cross Broadcasting and Prime. Of course there is also WIN, who are unlisted, and I suspect may well be interested in doing things too. And SOT - Soul Pattinson, which owns the Newcastle TV station for Channel Nine. 


CATHERINE MCGRATH: And what would happen, would they merge together, or would they be taken over by bigger interests? 


SCOTT MADDOCK: I think most likely, you know, one of the larger players would be interested in buying them. Certainly Rural Press, for example, would be interested in expanding its influence in the regional areas. 


CATHERINE MCGRATH: Under the Government's preferred model it will be possible to own a newspaper and a television station in the same big city market - effectively opening up the options for the major companies.  


The protection for diversity that's being offered is the so-called five-four voices test - five separate owners must exist in the city, four in the regions. 


The Communications Law Centre has been studying the impact of the proposed regulation and says the five-four voices test won't protect media diversity. 


Centre Director Elizabeth Beal says the test doesn't access the reach of each of the organisations. 


ELIZABETH BEAL: So that whilst the idea is to protect diversity by saying we will only allow mergers to occur provided that there is a certain number, in the case of metropolitan areas, five commercial organisations operating, doesn't necessarily take… well doesn't take into account the fact that the alternative outlets that are being relied on to provide diversity may not have a relevant market share. So that they in fact may not be alternative voices because they simply aren't being used. 


CATHERINE MCGRATH: What are you suggesting, that that particular outlet may have such a small audience, that it's not significant? 


ELIZABETH BEAL: It'll have such… it's not significant in the sense of providing the checks and balances that you really need to ensure an independent media. 


CATHERINE MCGRATH: Communications Minister Helen Coonan says diversity will be protected because traditional media outlets have been changed by the Internet. 


HELEN COONAN: Another safeguard is of course that the ACCC (Australian Competition and Consumer Commission) will be looking at every proposal to see whether there's any substantial lessening of competition. The proposal is that if this were to go ahead it would also be accompanied by new digital services on new spectrum. So the idea that there's any lack of diversity from any potential concentration is really fanciful. 


CATHERINE MCGRATH: Media analyst Scott Maddock rejects the claim that the Internet has changed the ground rules. 


SCOTT MADDOCK: I think it is providing alternative distribution. It's not providing alternative content. As a number of people have pointed out, the dominant providers of news on the Internet are in fact Fairfax, NewsCorp and PBL. 


CATHERINE MCGRATH: There's now one month for the public to comment on the Government's plans, and the Minister is considering bring in the legislation next year. 


Labor's communication spokesman, Stephen Conroy, says the five-four voices rule won't work. 


STEPHEN CONROY: It can't be good for a vibrant democracy to see the number of opinions and voices being halved in Australia's media landscape, which is already one of the most highly concentrated in the world. 




Democrats communication spokesman Andrew Murray is also critical of the formula. 


ANDREW MURRAY: Well my view is I think the common view, and that is that effectively they're talking about a ceiling not a floor. Now they can deny it as much as they want, but you only have to read all the media talking about the merger possibilities to realise that that's the business perception. 


CATHERINE MCGRATH: You believe they're talking about a maximum of five voices in the city? 


ANDREW MURRAY: That's right. Their spin is that it's the minimum, but you can see the reaction of the business media in all the papers today and yesterday who just talk about a frenzy of mergers.  


Well what that means is the big will be allowed to get bigger. That's not good for competition; it's not good for the number of political voices in this country. It's not good for the number of social voices in this country, and it's not good for the number of economic voices in this country. 


MARK COLVIN: Democrats communication spokesman Andrew Murray, ending that report from Catherine McGrath.