We can safely assume that Cowin can be taken as a very close proxy for Rinehart herself when it comes to media investment. They both sit on the board of Ten Network… in that venture they have recently lost money together and are now up for pumping in more cash after this week's $200 million capital rasing announcement.
Despite these pressures they clearly wish to extend their media interests at the diversified newspaper company. Indeed, Rinehart and Cowin have reportedly sought to join the Fairfax board on a double ticket.
In a carefully phrased ABC radio interview this week Cowin made four key points:
1. Rinehart has been a responsible director at the publicly listed Ten Network.
2. She has a more right wing view ‘than the average liberal journalist’.
3. Directors at Fairfax should have every right to get involved in the products of the company, and
4. Rinehart would be prepared to refrain from intervening in the company’s journalism if she could get her views heard clearly at board level.
And then Cowin served up what you might call 'a whopper', suggesting an opportunity at Fairfax was to inject ‘balance’ into the content of the group and more commentary in the mould of successful right wing columnist Andrew Bolt. Cowin inferred such views could appeal to a fresh audience and in turn this would translate into better revenues. (You can hear the interview here).
Beyond stating the obvious – that Fairfax is an unlikely platform to test such a theory – it's worth standing back and viewing this approach strictly as a value proposal in the Australian market.
Cowin and Rinehart have already had some opportunity to test the approach in television, but there is little evidence it has worked. Andrew Bolt’s Sunday morning program rates in perfectly conventional fashion for a Sunday morning show but it has not shot the lights out…if it had, we’d be seeing it at 7.30 in the evening.
Still, there has been some success in applying this thinking in the past – John Singleton's hiring of Alan Jones to radio station 2GB definitely worked within the strict confines of a Sydney radio demographic.
Indeed it might be Singleton's example that fires the imagination of both Rinehart and Cowin… Singleton is also a public supporter of Rinehart.
There is also the intriguing possibility that newspapers – maybe like cigarettes – are settling somewhere close to a new equilibrium and may soon start to make money again as a re-engineered industry.
Warren Buffett certainly seems to think so – just yesterday Buffett further topped up his accumulation of US regional newspapers with the purchase of the St Louis Post Dispatch. In May Buffett surprised the market spending $142 million on a range of regional newspapers across the southern states.
But for every Warren Buffett there is a Sam Zell – Zell is the real estate tycoon who went and bought the Chicago Tribune group in 2007 in an $8 billion highly leveraged deal. More than $300 million of Zell's money disappeared into the transaction. Unlike Gina, Sam Zell offers his opinion to all and sundry, and today four years later with the Chicago Tribune in bankruptcy Zell calls his foray into newspapers "the deal from hell".
Is Rinehart a Buffett or a Zell? If only she'd speak for herself on the subject, that would definitely sell a few newspapers.