Media essays

Media ownership in Australia

By Aaron Carey

(2002)
"The obvious danger of concentration of ownership lies in the possibility that variety of opinion may be stifled if one proprietor comes to control a number of newspapers which formerly presented varied and independent views. The greater the number of newspapers which are governed by the same editorial policy the greater is the danger."

This quote is taken from a submission that was made to the 1962 British Royal Commission on the Press. It shows that concerns over media ownership have been an ongoing concern around the world for many decades. Despite this concern Australia did not have any laws restricting media ownership, in particular media cross-ownership, until 1987 when the Hon. Michael Duffy the then Labor Minister for Communications introduced the Broadcasting (Owning and Control) Act 1987 which amended the Broadcasting Act 1942. Introduction of media cross ownership laws saw many media entities change hands. Between 1989 and 1991 the act was amended several times and in 1992 new legislation completely rewrote the original 1942 Broadcasting Act. Legislation governing media cross-ownership is essential to maintain a vibrant, diverse and independent media industry in Australia. Any watering down of current restrictions would see Australia, which 'perhaps [already] has the most concentrated print media ownership in the Western world' , have even more concentration in print media ownership.

According to the government web site Australia has laws restricting media cross-ownership 'to encourage diversity in the ownership of the most influential forms of the commercial media' . Media ownership rules are justified because the 'effective functioning of a democracy requires a diverse ownership of the daily mass media to ensure that public life be reported in a fair and open manner.'

The government controls media ownership in Australia under two acts of Parliament. In relation to the electronic media these controls are contained in the Broadcasting Services Act 1992. Powers relating to print media ownership are restricted to foreign ownership/acquisitions and competition laws contained within the Foreign Acquisitions and Takeovers Act 1975 and the Trades Practices Act 1974.

Current legislation states that a person or group of affiliated people owning a commercial television or commercial radio broadcasting licence cannot own more than 15 per cent of a newspaper published more than 4 days a week. However if a majority of the newspaper's circulation is outside the commercial radio or television licensees broadcast area a larger ownership stake can be taken in the newspaper. Newspaper proprietors are also restricted to holding no more than a 15 per cent ownership stake in television licences. The primary aim of these restrictions is to ensure that no one company or person has to much control over the news and media. A person holding more than 15 per cent is generally considered to have control over a company. In some cases a 15 per cent interest is not considered a controlling interest if someone else owns more than 50 per cent. Someone owning less than 15 per cent can be considered to have a controlling interest if no other person or company owns more than 2 per cent and doesn't act in cohesion with others.

In relation to foreign investment in the media the maximum total stake that can be taken foreign interests in mass circulation newspapers is 30 per cent. The maximum that any single foreign interest may take in a mass circulation newspaper is 25 per cent. Foreign interests can take a stake of up to 50 per cent in rural and suburban newspapers. Any proposal by foreign interests to establish a newspaper in Australia are subject to Government examination. Under legislation not specific to broadcasting the Government must approve any foreign investment in Australian companies including media outlets. The Australian Broadcasting Authority has primary responsibility for monitoring the ownership and control of Australian media outlets.

Richard Alston and the Government have long pushed for a change in the media cross-ownership laws, believing they are 'anachronistic' . It committed itself at the last election to amend the regulations to allow media cross ownership and further foreign investment. Labor is opposed to changing media cross ownership laws but supports a relaxation of foreign ownership rules. The Government argues that both cross media and foreign ownership rules must be changed together. Alston says by exempting a change in cross media rules from any change in media ownership rules, 'this would give large foreign-owned media companies, often unencumbered by cross-media rule in other markets, a major competitive advantage over Australian owned media outlets.'' Perhaps Alston and the Government are also unwilling to pass legislation purely allowing greater foreign ownership because this may upset the large number of people who voted for the coalition at the last election for xenophobic reasons.

Lindsay Tanner the Labor Party's Communications Spokesperson said in an interview, "The real focus is a question of diversity of media ownership. Relaxing foreign investment will increase diversity. If the foreign investment restrictions are relaxed we may even get more investment and more outlets." Former Prime Minister Paul Keating argues in favour of foreign ownership of Australian media outlets. He says the Government won't ease regulations governing only the foreign investment because they don't want to upset the current media moguls in particular Kerry Packer. The Government was also seen to be giving in to Packer's wishes when it decided the fate of digital television in Australia by protecting the current free to air television networks. Allowing for more foreign investment in the Australian print media should provide a wider diversity of opinion available to the public. However there is a chance that the Australian culture and voice could be at risk by handing over locally owned press outlets to foreigners. This is one of the strongest reasons people have been pushing in fighting a relaxation of foreign ownership laws, 'We have always wanted to own our media in this country...because it is the biggest single influence on forming our national identity and culture.'

Under the proposed legislation foreign takeovers of media outlets would need to be approved by the Foreign Investment Review Board and the Treasurer. This Neil Brown argues would 'lump it in with the breakfast foods and whatever else is up for sale and where takeover decisions simply become foreign investment approvals. And we all know how easy they are to obtain.' Of the 3347 applications to the Foreign Investment Review Board last year 3301 were approved. If foreign ownership rules are changed foreign acquisitions must be reviewed by a means which looks at media specific criteria that ensure local material and a local voice are maintained.

If foreign ownership limits are not changed existing legislation as it stands relating to foreign ownership must be strengthened, because at the moment it is ineffective. The most glaring example of this is American Citizen Rupert Murdoch's company News Limited which controls two-thirds of the circulation of Australia's major daily newspapers. Murdoch does this despite restrictions stating that any foreign shareholder can not hold more than 25 per cent in a mass circulation newspaper.

Those arguing in favour of media cross ownership have been highlighting the benefits for media operators and the positive financial reasons they will see from an easing of media cross ownership regulations. In the past media operators, 'wanted to get rid of cross-media rules for editorial reasons that is, to gain more political power and sack journalists to save money. But now there is now only one reason media companies want media ownership restrictions removed: to cash in their chips by selling to global giants or local monopolies.' Guy Dunstan of financial institution ABN AMRO says, "There are advantages for newspaper and television stations being together in the same market. It makes sense to move assets together for critical mass and a better cost structure." Dunstan while arguing the benefits of cross ownership for media companies goes on to make a very good argument why cross ownership will limit diversity, "You want them [the public] listening to your radio stations at breakfast, reading your newspapers throughout the morning, on your radio stations again at drive time and then your TV station in the evening." There has been very little to no mention of any benefits the public will see out of a change in regulations. Richard Alston in his campaign for a change in cross ownership laws has said that if the regulations aren't changed media companies will be forced to cut costs. This, he says, will result in a reduction in local news and information, less diversity of opinion and will see the demise on the emphasis on innovation. These same things could happen, and are more likely to, if the cross ownership laws are relaxed.

Media owners argue that by combining resources they can pass on the economic benefits and benefits of combined resources onto their customers. Studies show the benefits of 'economies of scale' aren't normally passed onto audiences. Instead any cost savings are made by the media corporations and are not passed onto readers and the quality of publications does not improve. Despite the arguments of media owners 'there would seem to be few compensating advantages to media audiences and customers.' When people argue that media cross ownership weakens diversity media owners argue that they will foster diversity by maintaining weaker titles using their financial clout. What ends up happening is the less profitable publications are closed anyway.

Proponents of a change in media cross ownership laws argue that diversity will be maintained and will actually increase in the digital age through outlets such as the internet, 'Diversity is coming through the digital era.' In theory the internet is allowing people to have their voice heard by anyone with access to a computer anywhere on earth, however most people are choosing not to listen. The most popular sites on the internet are the online sites of already established media outlets. Those people trying to establish independent and thorough news sites on the internet find that they don't have the resources to compete with the big media companies. Vicki Bourke the Australian Democrats spokesperson on media issues will play a major role in seeing whether media ownership legislation is passed in the Senate. At this stage she has made it clear she does not support moves limiting diversity. Bourke when discussing new media says "just because there are new forms of media coming up, doesn't mean that they're going to be different to what we've already got."

The Government proposes a number of safeguards to protect diversity within cross owned media outlets. If two separate media outlets were to come together under the one owner each would have to maintain separate newsrooms. Each media outlet would be required to have separate editorial policies; news compilation, management, reporting and interpretation would need to be done individually. These requirements have been met with scorn by those within the media industry. The Press Council says these measures would constitute "direct threat to the freedom of the press." It is interesting that the Press Council, a group that among other people represents journalists, would be opposed to a move that would effectively give media owners less say on editorial policy. Despite this, no matter what moves you make to protect the rights of journalists they are still unlikely to do something that would upset their boss. As British politician Aneurin Bevin said of Fleet Street, "There is no need to muzzle sheep." Fairfax states in its submission to the Senate committee reviewing the planned amendments to the Broadcasting Services Act "Restrictions on cooperation between mediawill work to defeat the very benefits that the legislation intends to deliver." In other words there is very little point in merging media companies if savings cannot be made by merging newsrooms. It would appear that the Australian Broadcasting Corporation (ABC) is already in breach of the governments proposed safeguards. Under the 'One ABC' policy introduced by former managing director Brian Johns, television and radio newsrooms were merged in a move designed to meet a lower operating budget. Just as media owners would merge newsrooms of print, television and radio outlets to save money the ABC has done the same thing. Under proposed regulations only the ABC is allowed to do this because it would appear it is acceptable for the government to save money in this way but not media owners. Safeguards proposed by the Government are not enough to limit the negative effects on diversity of media cross ownership.

To appease coalition partner The National Party and its constituency of mainly rural voters the Government has proposed a number of safeguards to maintain localism. Among these safeguards is an obligation to maintain local news levels and to guarantee at least five local television news bulletins per week.

Journalist Andrew Dodd focused on the rural city of Shepparton in North Central Victoria to look at the impact of proposed changes to the media cross ownership rules on regional media outlets. Shepparton with a population of 35,000 has two main media outlets; they are the Nine Network affiliate WIN Television and the 115 year old family run newspaper the Shepparton News. Under changes to the media cross ownership laws it is possible that these media outlets could come together under the one owner. While it is unlikely that the two companies would merge it is possible that WIN Television could takeover the Shepparton News. Dion Collard the manager of WIN Television says, "If we owned both the local newspaper and the local TV station we would run each independently. It wouldn't affect the community much at all." Collard goes onto acknowledge that his company would have "a bit of a monopoly", but says proposed changes to media cross ownership laws will not harm local news diversity because WIN Television is "community minded". What Collard doesn't discuss is what would happen if a company that wasn't as community minded as his company took over ownership of WIN Television. With the position that Dion Collard is in he cannot really talk candidly about the legislation because anything he does say could be taken up as an argument to stop any changes to cross ownership regulations. Ross McPherson the joint managing director and co-owner of the Shepparton News says that Shepparton has already seen a "huge diminution" of local content on television as a result of regional television aggregation. When discussing the proposed safeguard ensuring separate newsrooms McPherson says "it would be better having one owner having two sources of news than only one source of news." McPherson is one of the few people representing media companies to defend the safeguards, seeing them as "quite a valid model." His position could come from the fact he is representing the target of a possible takeover rather than being from a company looking to swallow up others.

While the merger of the Shepparton News and WIN Television may be hypothetical there is a very real possibility that Fairfax, publishers of the Age, Sydney Morning Herald and the Australian Financial Review, may be acquired by or acquire another media company. Most discussion over media cross ownership and Fairfax has focused on Kerry Packer and his intentions with regard to the company. Kerry Packer joined the Tourang Syndicate along with Canadian Conrad Black to buy the troubled publishing group in 1991. Due to Packer's interest in Channel 9 he was unable to own more than 15 per cent of the group. At the 1991 Parliamentary Print Inquiry much fuss was made over how much control Kerry Packer and Conrad Black had over Fairfax. Each had a 15 per cent interest in Fairfax, however Packer argued that with his 15 per cent interest he had no control of Fairfax but Conrad Black with the same interest had control because he was on the Board. It is a widespread belief that Kerry Packer did want to own more of Fairfax; "evidence points to the suggestion that Kerry Packer did want to obtain more that the share that he had in Fairfax." Seemingly out of frustration with the current regulations Packer sold his share of Fairfax in 2001. With any change to regulations governing media cross ownership it is possible that Kerry Packer may try to buy Fairfax. In Melbourne and Sydney this would mean that Kerry Packer would control the number one free to air television station and the number two newspaper of each city. Along with this he would also have a sizeable share of Foxtel, the number one pay television station. If Kerry Packer was to own all of Melbourne's major media organisations and the casino there would be far fewer voices that could question casino dealings, it is unlikely anyone within the Packer organisation would take that risk.

Within Fairfax some major changes are taking place. There is some concern about editorial independence among journalists over the idea of merging the Canberra bureaus of the Age and the Sydney Morning Herald. Fred Hilmer the Fairfax Chief Executive says of the changes taking place "The additional cross-group collaboration and co-operation will promote further process improvements so that we can operate more efficiently." While he denied plans to merge the Age and the Sydney Morning Herald many believe this is effectively what is happening in the company at the moment. Any moves to increase 'collaboration' within Fairfax will inevitably lead to less diversity.

Overseas experience shows that despite assurances from media owners not to interfere with the editorial independence of a newspaper inevitably they get their own way. When Rupert Murdoch took control of London's The Times newspaper he gave guarantees to the editors of both The Times and The Sunday Times that they would have independent control over their newspapers. These guarantees meant editors would have control over journalists, editorial opinion and news balance and selection. Harold Evans formerly of The Sunday Times was appointed editor of The Times by Rupert Murdoch. Within a year Evans was forced out by what he said was constant editorial interference from Murdoch.

Before media cross ownership legislation was introduced in 1987 Network Ten was owned by News Corporation and Channel 7 Melbourne (HSV7) was owned by the Herald and Weekly Times. The fact that between August 1986 and March 1987 that these companies changed hands shows that media cross ownership laws are somewhat effective in providing a wider diversity of ownership in the Australian media. This diversity of ownership should help to provide a more diverse range of information material to the Australian public.

Media cross ownership regulations should not be eased to allow companies to own significant controlling stakes in more than one media type in the same licence area. For example no one media company should be allowed to have significant controlling stakes in a television network and newspaper in the same area. What the Government should be doing is to make it easier for new entrants, be they Australian or foreign owned, to come into the Australian marketplace to provide new and diverse print publications.

REFERENCE LIST

BOOKS

Alger, Dean, Megamedia - How Giant Corporations Dominate Mass Media, Distort Competition, and Endanger Democracy, Lanham, Rowan & Littlefield Publishers, 1998.

Congdon, Tim et al (eds), The Cross Media Revolution - Ownership and Control, London, John Libbey and Company, 1995.

CHAPTER TITLES

Brown, A. & McComas, W.R., 'Do we have too few media proprietors in Australia', in Giles, R. (ed.), For and Against: An Anthology of Public Issues in Australia, Melbourne, Brooks Waterloo, 1989, pp.216-217.

Henningham, J., 'The press', in Cunningham, S. & Turner, G. (eds.), The Media in Australia: Industries, Texts and Audiences, Sydney, Allen & Unwin, 1993, pp.59-71.

Turner, G., Making it National: Nationalism and Australian Popular Culture, Sydney, Allen & Unwin, 1994, pp.145-150.

GOVERNMENT PUBLICATIONS

Working Party into Print Media Ownership, Report, V.P.P., 1990.

NEWSPAPER ARTICLES

Ackland, R., 'Media's back is going to the wall', Sydney Morning Herald (April 5 2002), pg.11.

Alston, R., 'The cross-media laws must go - for diversity's sake', Age (April 12 2002), pg.15.

Bone, D. Crabb, A., 'Foreign ownership of media not important, says Alston', Age (April 1 2002), pg.5.

Brammall, B., 'Rumours fly over Fairfax mergers', Herald-Sun (May 28 2002), pg.29.

Brown, N., 'No, minister: Alston gets it wrong', Age (May 29 2002), pg.15.

Coorey, P., 'Media ownership; rewriting the rules', Advertiser (March 9 2002), pg.69.

Crabb, A., 'Media changes 'a threat' to press', Age (February 19 2002), pg.5.

Crabb, A., 'Fairfax flags legal challenge on media ownership law', Age (May 23 2002), pg.2.

Day, M., 'Alston's Bill, or splendid isolation - On media', Australian (March 28 2002), pg.6.

Dodd, A., 'Keating blasts media proposals', Australian (March 28 2002), pg.3.

Dodd, A., 'One owner, two news outlets', Australian (March 28 2002), pg.3.

Hamilton, I., 'As big players wrestlemedia's in the crosshairs - Mergers and Acquisitions', Australian (April 11 2002), pg.10.

Kohler, A., 'Why media must diversify or die', Australian Financial Review (March 26 2002), pg.63.

Korporaal, G., 'APN rides the rural boom', Australian (April 4 2002), pg.7.

Lawson, A., 'Packer eyes Fairfax', Age (April 6 2002), pg.4.

Lawson, A., 'Fairfax attacks plan to police media operators', Age.

Marriner, C., 'Murdoch not holding breath on media laws', Age (March 22 2002), pg.4.

'Easing media rules may not be enough', Australian Financial Review (February 11 2002), pg.55.

'Media Policy: A Fresh Approach', Australian Financial Review (April 15 2002), pg.62.

RADIO

The Media Report, Presenter: Mick O'Regan, ABC-RN, 0830, 26 July 2001.

The World Today, Presenter: John Highfield, ABC-RN, 1230, 3 May 2001.

WWW SITES

'Overview of Australia's Media Ownership Rules', (18 April 2000) CLC: Research, http://www.comslaw.org.au/research/Ownership/19971119_mediaownrules.html, 27 May 2002.

'The Business of the Media is not Just Commercial', (18 April 2000), CLC: Research, http://www.comslaw.org.au/research/Ownership/11971118_mediabusiness.html, 27 May 2002.

'What's Wrong With the Cross Media Rules?', (18 April 2000), CLC: Research,
http://www.comslaw.org.au/research/Ownership/11971118_media_rules.html, 27 May 2002.

Kim Jackson, 'Media Ownership Regulation in Australia', (26 March 2002) Parliament of Australia: Department of the Parliamentary Library, http://www.aph.gov.au//library/intguide/sp/media_regulations.htm, 27 May 2002.

'Steven Brill' (September October 1998), Mother Jones, http://www.motherjones.com/mother_jones/SO98/ledbetter.html, 27 May 2002.

Author contact: careyaaron@email.com

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