Media put committee through spin cycle on audience reach
But make no mistake, for those media groups providing evidence before the joint parliamentary committee in Canberra, their views reflect their financial positions ahead of any ideological stance or community concerns.
The nation's capital was awash with media moguls on Monday, arguing their cases about whether mergers were good or bad.
Their spin on whether 75 per cent audience-reach rules should be relaxed was centred on the needs of regional Australians, their access to local news and the concept of media diversity. That was the rhetoric.
One national network operator, Nine, is gasping to get the 75 per cent reach rules relaxed because it has plans to merge with a regional operator, Southern Cross.
Nine boss David Gyngell says he is passionate about giving the folk of Wagga a better home-grown news service and will employ a bigger local journalist team to achieve it.
What Gyngell really wants is to merge with Southern Cross and weave some financial magic to increase the profit from the combined group. Some of this may be funnelled back into better regional programming.
Whether this works better for for Southern Cross shareholders or Nine's owners is a separate issue. The market can't make an informed judgment on who's shareholders might benefit because we don't know the details of how any spoils may be divided. But there will be a relative winner and a relative loser.
Ten, the third-ranking national network and currently affiliated with Southern Cross, is strident in its argument against allowing the metro networks to acquire regional operators.
This makes sense for Ten because it doesn't have the money to buy a regional network, nor does it have the ratings appeal to attract a regional partner.
Its chief executive, Hamish McLennan, justified the company's disdain for audience-reach relaxation saying the point of the mergers would be to rip out costs and that claims (by Nine) that it would be able to spend upwards of $15 million to grow news rooms around regional Australia defied commercial reality.
Seven, controlled by Kerry Stokes, seems to be taking a bet each way. He believes the changes should not be rushed through.
His motivation has little to do with looking after the people in the bush. Of course, he won't say this, but he will ascribe a purely financial agenda to the owners of Nine Network.
"Now, there may well be good reasons to merge various media groups to get more [efficiency], but I can promise there isn't any way two hedge funds in New York [the biggest shareholders in Nine] and Macquarie Bank [the biggest shareholder in Southern Cross] are going to merge things to give you more news services," Stokes said.
He is right about that.
As for Southern Cross, loosening the ownership rules is a great idea, because it is engaged in merger discussions with Nine.
Prime Media, which owns the Seven regional affiliate, agrees. This is because it recognises that it becomes a takeover target, and that is great for its share price.
Frequently Asked Questions about this Article…
The proposal under discussion is to relax the 75 per cent audience‑reach ownership cap that limits how much of the TV audience a single network can reach. Investors should care because relaxing the rule would enable metropolitan networks to buy regional operators, triggering potential mergers, changes in profit mix, and shifts in share prices for companies involved.
Nine wants the rule relaxed because it plans to merge with regional operator Southern Cross. Nine’s CEO David Gyngell says the merger would allow the group to increase efficiency and that some of the gains could be re‑invested to expand local journalism and regional programming.
The article says there will be a relative winner and loser among shareholders after any merger, but the market can’t judge which side benefits yet because the details of how profits or savings would be divided haven’t been disclosed. That uncertainty is a key investor risk.
Ten is strongly against relaxing the reach rules. CEO Hamish McLennan argues that mergers are likely to be used to cut costs rather than expand regional newsrooms, and he says claims (for example, by Nine) that they could spend upwards of $15 million to grow regional newsrooms defy commercial reality.
Seven, controlled by Kerry Stokes, is cautious and says any changes shouldn’t be rushed. Stokes also expressed scepticism that major shareholders like US hedge funds and big institutional owners would use mergers to expand news services — implying financial motives may dominate.
Southern Cross supports loosening the rules because it is engaged in merger discussions with Nine and would benefit from fewer regulatory barriers. Prime Media, which owns the Seven regional affiliate, also supports the change because it could become a takeover target, which the article says would be positive for its share price.
Investors should watch for signals about the financial motives behind submissions — the article notes media groups’ public arguments often reflect their financial positions. Key things to track are proposed cost‑savings, promised regional spending (like the cited $15 million), shareholder composition, and whether deal details are disclosed.
The joint parliamentary committee hearing was the forum where media executives and stakeholders presented evidence and argued for or against relaxing the reach rules. The hearing highlighted contrasting positions — metropolitan networks pushing relaxation to enable mergers, while rivals and some regional interests warned about cost‑cutting and reduced diversity.
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