Channel Ten is not insolvent — its voluntary administration is simply a ruse to allow Rupert to take over the rest of Australia’s mainstream media. Managing editor David Donovan explains.
I SHOULDN'T NEED to write about the reasons behind the so-called “bankruptcy” of Channel Ten, because the reasons are blatantly apparent. But, try as I might, I can’t seem to find this sort of commentary anywhere — apart from on social media, of course.
It’s enough to make one think our media representatives are either stupid or corrupt. Heavens! Perish the thought.
Here are the facts.
Channel Ten has gone into voluntary administration. Receivers KordaMentha have been appointed. This happened after shareholders Lachlan Murdoch (7.7%) and Bruce Gordon (15%) refused to guarantee a new finance package — one that does not become due until December. There is no problem with liquidity at Ten — it has good cashflow and is paying all of its bills as they become due. In short, it is not insolvent.
Nevertheless, this voluntary administration, made during the second last sitting week of Parliament before the long winter recess, did allow Communications Minister Mitch Fifield to yesterday stand in front of the cameras and solemnly urge the Parliament to pass his new media “reform” laws. This media package, which also removes the need for broadcasters to pay licence fees, was tabled in the Lower House this morning (15/6/17).
The Murdoch letter that triggered Ten's collapse https://t.co/NT8Ni6RIQd via @FinancialReview
— Dave Donovan (@davrosz) June 15, 2017
These new media regulations open up Australia’s mainstream media market – already the most concentrated in the Western world – to even more consolidation. Ten has been among the most vocal supporters of the reforms. Lachlan Murdoch is executive co-chairman of News Corp. His father, News Corp chair and owner Rupert Murdoch, has long coveted a free-to-air television licence in Australia, but has been denied by Australia’s media laws. With Australia’s weak media ownership regulations binned, the Murdoch family’s News Corp Goliath would finally be able to acquire Channel Ten — and more.
Veteran Murdoch watcher, former Liberal Party staffer and Crikey founder Stephen Mayne had this to say about these events on ABC 7.30 last night:
The Murdochs and Bruce Gordon cannot buy Channel Ten in its current form unless there is media reform.
So, the two out of three rule stops the Murdochs and the reach rule, about 75 per cent reach in the television market, stops Bruce Gordon.
So, we now have a game of cliff-top poker, where there's a sense of crisis that comes into the political debate — that Ten is in crisis, Ten is in administration, what will happen with Ten?
Those were the facts. Now for the commentary.
Small shareholders cry foul as Ten goes into administration https://t.co/6Ft9yT0LDq @abc730 pic.twitter.com/eVCuckgaQ6
— Dave Donovan (@davrosz) June 15, 2017
In his commentary on 7.30, Stephen Mayne said the whole thing was “puzzling”:
This is the most unusual administration that I've ever seen — where a company that is doing a whole bunch of things to fix itself, and doesn't have to pay its debts back for another six months and has only borrowed one third of the total amount that it can borrow from its banks, has pulled the plug and handed over the business to administrators.
So, it's very puzzling.
Puzzling? I’m pretty sure that Stephen Mayne, like the rest of Australia’s media commentators, is not in the slightest bit puzzled by this “unusual administration”. It is, perhaps, a sign of the sickness infecting Australia’s media and another reason why more concentration of ownership is one of the very last things we need, that the truth here is not being shouted at us from rooftops, treetops and from every media outlet.
The really very far from amazed Mayne explained the reasons quite clearly:
"The Murdochs and Bruce Gordon cannot buy Channel Ten in its current form unless there is media reform."
The unnecessary voluntary administration of Ten is a power grab by News Corp, aided by Bruce Gordon. It is less about Ten, of which Lachlan Murdoch owns a relatively small stake, and more about the entire Australian market, into which Rupert wants to finish off his long-term project of total wall-to-wall domination.
For, as Mayne also said:
"... we now have a game of cliff-top poker, where there's a sense of crisis that comes into the political debate — that Ten is in crisis, Ten is in administration, what will happen with Ten?
Is Australia’s level of media ownership concentration one of the highest in the world? #FactCheck verdict: yes. https://t.co/E26vWnJPoX
— The Conversation (@ConversationEDU) December 12, 2016
Let’s get real about the reasons.
By not guaranteeing finance, Gordon and Murdoch have sent Ten into an unnecessary administration in order to put pressure on Labor and the crossbenchers to pass the media reform laws — which are, by no coincidence, in front of them right now. By the passing of these laws, News Corp – which owns most of Australia’s newspapers, as well as the nation’s only Pay TV network – will be allowed to take over television and radio assets everywhere. It will also allow the Murdochs to horizontally and vertically integrate their extensive and predominant media assets.
It is when a company is able to develop a monopoly in a particular market that extraordinary profits are able to be made. And if there is one thing we know, Murdoch loves a monopoly. If, after the media reform laws are passed, Rupert does not pick up Ten at a receiver’s fire-sale, which he probably will, he will simply turn his attention to acquiring other lucrative domestic media assets.
The most tragic thing about this whole tawdry affair is that allowing fewer voices and increasing market reach will not necesssarily save any Australian mainstream media outlets. It will simply allow for select ones to increase their market share and, by letting others go broke, help to ensure fewer voices. If, with the advent of the YouTube generation and internet streaming services, Ten is no longer profitable, allowing increased investment into Ten is not going to make free-to-air television in Australia suddenly profitable again. The market is still the same. It won’t get rid of the internet. It won’t increase viewers, or the number of advertisers. Overall, it won’t grow the market. It will simply mean that Ten may survive at the expense of another of Australia’s teetering television broadcasters, such as the long struggling Network Nine.
Whatever happens with Ten, get ready for fewer free-to-air networks on your flatscreen and more of those that are left being owned by Uncle Rupert. It’s got nothing to do with Ten; it's just a dodgy deal cooked up between the Coalition and Murdoch to allow him ─ and maybe a couple of other tycoons, such as Gordon (for now) – to take over the rest of Australia’s old school media. In return, Murdoch has probably pledged his publications' support to Malcolm (again, for now).
.@SenatorFifield: I think that if you've got all media on board a proposition, it should be seriously considered. https://t.co/j3HeLaUtwT pic.twitter.com/IF8jpawvmW
— Sky News Australia (@SkyNewsAust) June 1, 2017
This is no conspiracy, it’s just business … and politics … and the way things work in this country. And, if you don’t believe me, read IA contributor Dr Cameron Murray’s excellent book on Australia’s very distinctive style of corruption, the Game of Mates.
What is puzzling is that no-one in our mainstream media is prepared to say this — the bleeding, bloody obvious.
On second thoughts, maybe it’s not so puzzling at all.
You can follow managing editor Dave Donovan on Twitter @davrosz.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
By me from 2011, but still as true today: 'Concentrated media ownership: a crisis for democracy' https://t.co/79lFvqnutp @IndependentAus
— Dave Donovan (@davrosz) June 14, 2017
Don't be deceived. Subscribe to IA for the cost of a coffee.
Monthly Donation
Single Donation
