Media barons face new test

The convergence review is recommending a public-interest test designed to protect diversity of media ownership and prevent too few voices controlling Australian media. Communications Minister Stephen Conroy has said the review will include a strong recommendation for such a test, but there was no final decision in the interim report on exactly how the test would be decided or enforced.

The review aims to update ownership rules to reflect digital delivery and new platforms, not simply remove limits. Interim findings say there will still be a maximum number of media entities any one party can own in a market, but rules like the old 'two‑out‑of‑three' test may be changed to recognise national newspapers, internet platforms, IPTV and subscription TV.

The article lists several major players and the stakes reported then: Gina Rinehart (Hancock Prospecting) — about 14% of Fairfax Media and 10% of Ten Network; James Packer — large interests through Consolidated Holdings/Consolidated Media Holdings (about 50% including Fox Sports and Seven Group interests) and roughly 9% of Ten Network; the Murdoch family/News Corporation — about 39.7% (including News Ltd and other assets); Lachlan Murdoch (Illyria) — about 9% of Ten Network, 50% of Nova/Vega radio and 9% of Prime Media Group; Kerry Stokes (Australian Capital Equity) — about 68% of Seven Group (including West Australian Newspapers, Pacific Magazines, Channel Seven, Yahoo7); Bruce Gordon (Bireketu) — 100% of WIN Television and about 10% of Ten Network.

The 'two‑out‑of‑three' cross‑media rule limited ownership across television, radio and newspapers, but the review says internet delivery means media entities now operate across many platforms and wider areas than licences imply. The rule doesn't account for national newspapers, online platforms, IPTV or subscription TV, so reviewers want to update regulation to recognise the full range of relevant media outlets.

The interim report recommends creating a new independent communications regulator with tougher powers than the current Australian Communications and Media Authority (ACMA). For media companies and investors, that could mean stricter enforcement of ownership tests and updated oversight as digital platforms are brought into the regulatory framework.

According to the article, under current rules Gina Rinehart cannot own more than 15% of Fairfax and Ten — the two companies in which she already holds stakes. Any change to that cap would depend on the outcome of the convergence review and any new rules or public‑interest tests introduced.

The article says the convergence review's final report was scheduled to be released the following month. The final findings will take account of the Independent Media Inquiry (the Finkelstein inquiry) and the Australian Law Reform Commission's review of the National Classification Scheme.

Everyday investors should be aware that the convergence review could change ownership caps, introduce a public‑interest test and create a tougher regulator — all of which are regulatory risks that could affect consolidation, takeover activity and valuations in media stocks. The interim report emphasises updating rules for digital platforms, so investors should monitor final recommendations and regulatory developments rather than assume current ownership limits will stay the same.