Media shrills at proposed Gillard reforms

The wave of opposition to the government's proposed media reforms was as personal as it was shrill - the extreme end of which was Rupert Murdoch's The Daily Telegraph depicting Communications Minister Stephen Conroy in ideological league with Stalin, Castro and Mugabe.

The wave of opposition to the government's proposed media reforms was as personal as it was shrill - the extreme end of which was Rupert Murdoch's The Daily Telegraph depicting Communications Minister Stephen Conroy in ideological league with Stalin, Castro and Mugabe.

Sure, the set of changes were delivered via press release in a ham-fisted manner with insufficient detail, but it is not the first time governments have engaged in poor communications and policy execution.

The issue for News Ltd is that it appears to be the main target. Julia Gillard wants to rein in Murdoch's ability to continue the unfettered anti-government editorial spray. Thus it was not a surprise that the News Ltd press and its management were screaming the loudest.

News Corp's Australian boss, Kim Williams, was on the offensive, likening the government to a "public interest Soviet tsar".

The introduction of the Public Interest Media Advocate to oversee press standards might ultimately be harmless, but neither the breadth of its scope nor its powers to sanction were in the detail of the press release.

Any curtailment of press freedom catches others in its net, which is why Fairfax Media management was cold on the idea of a legislated press standards body. No industry takes well to increased regulation or oversight.

Thus Conroy left himself open to critics who said the proposals would endanger press freedom.

Putting that concern aside, the remainder of the package received a response typical of any new proposed policy. It was all about self-interest.

Those most directly affected are the free-to-air TV networks. The metropolitan networks and their regional counterparts are all in favour of the plan to cut licence fees. None were debating the merits of this and the remainder of the industry doesn't care.

But the abolition of the 75 per cent audience-reach rule elicited a different response. In theory all the three metro networks are in favour - and have previously argued for this relaxation.

But today there is only one - Nine Network - that has its ducks in a row to act on it. Nine and regional operator Southern Cross Media are well down the path of negotiating a merger that would result in a back-door stockmarket listing for Nine.

It has the first-mover advantage and the others, Ten and Seven, don't like it. It disadvantages Ten the most because Southern Cross is its regional affiliate.

It suits Southern Cross because teaming up with a higher-rating Nine Network will improve its ratings and the corporate tie-up should lead to a stock rerating, depending on the terms of the merger.

Nine's regional affiliate, WIN TV, would be left without a dance partner, in what would constitute the end of a messy night. It runs the Nine feed in regional Australia and owns the Nine metropolitan stations in Perth and Adelaide.

WIN might therefore ultimately have to manage two sets of affiliations - use Nine Network for these two capital cities and another, probably Ten, for its regional feed. To complicate matters further, the owner of WIN, Bruce Gordon, is a large shareholder in Ten.

Increasing TV audience reach to 75 per cent gives all the networks optionality but for Ten and Seven buying a regional network might not suit them right now. Both would need to raise equity to undertake such an acquisition, and Ten in particular would find this difficult and dilutive given its current performance.

And allowing Nine to get ahead of the game and receive all the positive synergies of owning a regional network would put them at a disadvantage. It would certainly place pressure on Seven to move on Prime TV, its current affiliate.

In a general sense, it would put the regionals in play. Gordon, who is in his 80s and operates WIN from his home in Bermuda, seems to be in no rush to sell his business.

Meanwhile the government's attempts to look at television supply agreements appear to be directly pinpointing the relationship between News Ltd and Ten Network - the former controlled by Rupert Murdoch and the latter by his son Lachlan.

The government has been concerned about the editorial tie-up between News and Ten's political current affairs program Meet the Press. And the recent appointment of a News Ltd executive, Hamish McLennan, to run Ten only adds to the government's unease.

The public interest test on any future media mergers is the aspect of the new proposals that could be a sleeper. This should be adequately dealt with by the ACCC and appears to represent a new, unnecessary layer of regulation.

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