Hear that shuffling sound? It’s the noise made by the increasingly desperate directors of APN News & Media and Fairfax Media trying to jettison their New Zealand print assets, while dancing to the tune of News Corp Australia. And why is the Murdoch clan playing puppet master? Because it controls 14.9% of APN (and News’ chairman, Michael Miller, is a former APN CEO, who before that gig was a trusted News executive), and that is the key to what could turn out to be the last big print shuffle in this part of the world.
According to media reports this morning, APN wants to raise up to $200 million as well as separate its NZ print (and radio assets). If that is to succeed, News Corp will not only finance up to $30 million of that (and help make it a success) but will pick up 14.9% of the about-to-be-spun-off NZ assets. And, if APN and Fairfax do more than just talk and complete a merger of their Kiwi newspaper interests (subject to competition reviews), News will end up as the major shareholder in any merged company, giving itself trans-Tasman dominance.
In Australia rumours persist that News is sniffing round some of the 16 regional dailies that APN has put on the market (in February, without any success). APN has close to 200 papers on the market, including the big dailies, plus smaller local, regional and community free papers. It would be a big bite for anyone, especially at a time when print is dying. News with its 14.9% stake is said to be the only serious buyer. Fairfax isn’t interested (it has its own headaches in its regional papers). Some conspiratorial types in the media claim that APN and News will reveal a deal about its Australian papers during the election campaign and suggest that without such a purchase, the future of the papers is very uncertain (hint: they might shut — a gun to the head of the competition regulator, the ACCC).
On top of the print assets, News will also control 14.9% of APN’s Australian radio networks if APN is successful in spinning off NZ and raising the cash. In fact, they will go nicely with Lachlan Murdoch’s Australian two radio networks.
News will stress, as APN and Fairfax are said to be about to argue in New Zealand, that Facebook, Google, etc are the real competition, not News or Fairfax or APN. APN is expected to announce a capital raising and demerger of its New Zealand business at its AGM in Sydney tomorrow. APN yesterday requested that its shares to be suspended until Wednesday morning to allow for a decision on the demerger of the Kiwi print interests. It laughingly said it “the reason for the trading halt is to prevent trading taking place in a speculative or uninformed market”. Given the amount of leaking yesterday and overnight about what is happening, the suspension should have been removed this morning and APN told to provide an immediate update. Some rather curious trading last week in APN shares. Those deals were nicely highlighted in the Financial Review’s Rear Window column this morning.
And then there’s TV and other local print assets. The upshot of all this is that by the end of the year the Murdoch clan could control more than 70% of all print in Australia. And remember News and Seven West Media are moving to a deal in Perth involving the Sunday Times, which is owned by News. Kerry Stokes’ Seven West Media owns the West Australian, and is the half owner of Presto, the streaming video service 50% owned by Foxtel, which is 50% owned by News. Also remember News Corp and Telstra want to move towards a revamping of the ownership of Foxtel, with News buying some of Telstra’s stake and then floating the pay TV business. News also has expressed ambitions to buy control of Sky News from Seven and Nine and Sky News of the UK (which the Murdoch clan controls).
And finally, the decision by Fairfax management to compulsorily retrench 30 journalists from The Age, the SMH and Financial Review underlines that all the shuffling APN, News and Fairfax are now engaged in across the Tasman is essentially a waste of time and money, that the remorseless slide in print ad revenues is unstoppable, and that not even their digital property arms of the News and Fairfax empires can hold back the tide. But the Murdochs aim to get such a dominant position in Australian media that they can at least influence the speed of that tide. It will buy them a couple of years breathing space, but in the meantime, we could awaken after the election and discover that Rupert Murdoch and his sons plan to turn Australia (and NZ) into their backwater where only one voice is important. For Australians and Kiwis, Facebook and Google will loom as the only viable alternatives to daily news and information flows, along with the ABC if it is allowed to survive by whatever weak-kneed government sits in Canberra.
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