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Panpa Bulletin : November December 2006
rope evolution? November--December 2006 PANPA BULLETIN | 33 COVER STORY "I just think everyone ought to calm down. . ." PM Howard grabs a spot of "me time" flash flood of cash through the sector in a rush of buyouts, mergers, entries and exits. The new bill relaxes ownership restric- tions on several fronts. Of the traditional media platforms -- radio, television and newspapers -- players will be allowed to own two out of three in the same city or region. They're currently restricted to one; Howard and Coonan wanted to extend it to three but the Nationals blocked it. And for- eign interests will be allowed a controlling stake in a television, or to own more than 25 pc of a newspaper. "Australia is a relatively small market and the players are very big players and have not been able to increase their holdings for many years," independent media analyst Peter Cox told AFP in July. "If the legisla- tion goes through, it will allow a television network to buy a newspaper group and vice versa." Plus, he added, "bankers in Australia will be desperate to do media deals and will apply major pressure on the parties so they can earn their fees." Indeed, it's already started. The moment the changes were announced, the majors began jockeying for position. News Ltd announced a 7.5 pc buy-in to Fairfax, worth AUS$388 million. Media rumour mills ran warm that James Packer's newly restruc- tured PBL, awash with new cash after a near 50 pc sell-off to private equity group CVC Asia Pacific, would come after Fairfax. The Packer camp's insistence it harboured no such ambition was met with mild scepti- cism. Such a move would, after all, fulfil an ambition long cherished by Packer's father Kerry. The consensus among commenta- tors and their sources was that News had seen fit to buy itself a spoiling stake, just in case. News's New York office called it a "friendly" investment. Fairfax's statement to the Australian Stock Exchange called it a "friendly" investment. And Fairfax CEO David Kirk rubbished premonitions of a carve-up of his charge with the rationale that its cross-media operations are now too tightly interwoven for that to happen. Across the country, meanwhile, Kerry Stokes's Seven Network acquired a 14.9 pc interest in West Australian Newspapers, the maximum allowed under the existing laws. And Irish newspaper group Independent News and Media -- the O'Reilly family ve- hicle -- embarked on a AUS$3.8bn takeover bid for APN News & Media, in which it al- ready has a 40 pc stake. By late November, they had withdrawn the offer. The political responses were predictable. Senator Coonan and Prime Minister John Howard downplayed the impact of the laws Two decades ago, the Hawke government tightened up cross- media ownership, leaving local and foreign investors alike tightly tethered in their ownership ambitions. Now, new laws tabled by the Howard government loosen things up, to the considerable bene t of the newspaper industry, writes Jeremy Bass. New media render old principles of geographical containment obsolete. With the internet s transcendence of such boundaries, it hardly seems logical or fair to continue shackling conventional media in the face of such competition continued page 34 Andrew Taylor/Frfaxphotos