Murdoch wants his pound of flesh
The jungle drums say his agenda also includes discussion on the abolition of anti-siphoning laws restricting the ability of pay-television operator Foxtel to exclusively broadcast first-run premier sports events.
The lobbying is said to extend to the Foreign Investment Review Board (or at least its ultimate master, Treasurer Joe Hockey) and media regulator the Australian Communications and Media Authority.
The acquisition of Ten has long been speculated to be on Murdoch's wish list, but under the previous government the notion of doing News Corp any favours was fanciful. It would make perfect sense for Murdoch to revisit this lobbying under the Abbott regime.
Indeed, he was seated alongside Hockey and Communications Minister Malcolm Turnbull at the Lowy Institute gala dinner in Sydney last Thursday. Both the ministers, together with A-list business representatives, attended the function to hear Murdoch's lecture on his vision for Australia.
The trouble is that neither of these items would be easy for even the current government to resolve.
Let's take the acquisition of Ten. Under the current media and competition laws this scenario wouldn't pass muster. News Corp is the largest print operator in Australia with near total coverage of all major markets. Murdoch's son, Lachlan, who owns just under 10 per cent of the Ten Network, also owns DMG, a national radio network with stations in each capital city, and is a director of News Corp.
In two markets in particular - Brisbane and Adelaide, where News owns the major newspapers - the obstacles are even greater.
Thus there are a couple of hurdles the Murdochs would need to mount to allow such a move.
The first is getting around the rule that restricts media organisations to owning two of the three media (print, radio and TV) in a market, and the second is foreign ownership.
Murdoch would need to convince regulators that he and his son were not related parties in a corporate sense, and it is hard to see that notion flying. It would be further complicated by the fact that News Corp owns half of Foxtel and all of Fox Sports, which supplies the former with programs.
The ACCC made it clear when Seven tried to take a larger stake in Foxtel that the move was unacceptable. Having said that, it has remained silent to date on recent moves by Ten and Foxtel to a proposed sales force tie-up.
The already close links between News/Foxtel and Ten have been well documented, including the appointment of former News Corp executive Hamish McLennan to run the network.
Perhaps the bigger question is why Murdoch snr would even wish to buy the troubled third-rating network, which has needed its existing major shareholders - Lachlan Murdoch, James Packer and Bruce Gordon - to guarantee its recently refinanced debt package.
There are cross-promotional opportunities and there is a chance that over time Ten's fortunes may improve, and buying it cheaply is good business. It would also serve to extract Lachlan from an investment in television that represents an embarrassing blot on his commercial record.
The abolition (or at least the relaxation) of anti-siphoning laws would be a far bigger boost to News Corp.
Before this year's split of Murdoch's empire, Foxtel's performance was a much smaller contributor to his international empire.
But in the new News Corp, which now houses the international print business and the 50 per cent stake in Foxtel and 100 per cent stake in Fox Sports, these are major contributors to its performance.
Foxtel's penetration continues to be less than half that achieved by cable operators in the US, due mainly to the restrictions on sport coverage.
But to allow Foxtel exclusive live access to premier sport would be so unpopular with the public (and the powerful free-to-air television lobby) that it is difficult to see how this favour could be granted - even to Rupert Murdoch.
But if any government was to allow Murdoch a good hearing, it would be the current one.
Frequently Asked Questions about this Article…
Rupert Murdoch is interested in acquiring the Ten Network due to potential cross-promotional opportunities and the possibility of improving Ten's fortunes over time. Additionally, buying it cheaply could be a good business move and help extract Lachlan Murdoch from an investment that has been a blot on his commercial record.
Rupert Murdoch is interested in acquiring the Ten Network as part of his strategic media expansion. The acquisition could offer cross-promotional opportunities and potentially improve Ten's fortunes over time. Additionally, buying the network at a low price could be a smart business move.
Murdoch faces challenges such as media ownership laws that restrict owning two of the three media types (print, radio, and TV) in a market, and foreign ownership regulations. He would also need to convince regulators that he and his son are not related parties in a corporate sense.
Murdoch faces several challenges in acquiring the Ten Network, including navigating media and competition laws that restrict media organizations from owning more than two of the three media types (print, radio, and TV) in a market. Additionally, he must address foreign ownership rules and convince regulators that he and his son are not related parties in a corporate sense.
Anti-siphoning laws restrict Foxtel's ability to exclusively broadcast first-run premier sports events, limiting its market penetration. Relaxing these laws would significantly boost News Corp's performance, as Foxtel and Fox Sports are major contributors to the company's success.
Anti-siphoning laws restrict Foxtel's ability to exclusively broadcast first-run premier sports events, limiting its market penetration. Relaxing these laws would significantly benefit News Corp by allowing Foxtel to offer exclusive live sports coverage, potentially increasing its subscriber base.
The anti-siphoning laws are significant because they prevent pay-TV operators like Foxtel from having exclusive live access to premier sports events, ensuring that such events remain accessible to the public through free-to-air television.
Lachlan Murdoch owns just under 10% of the Ten Network and is involved in its operations. His investment in the network has been seen as a challenging aspect of his commercial record, and acquiring Ten could help extract him from this investment.
The current government, led by Tony Abbott's Coalition, might be more receptive to Murdoch's lobbying efforts due to his significant contribution to their election. This political alignment could provide Murdoch with a better opportunity to push for changes in media regulations.
The acquisition of Ten Network is significant for News Corp as it could enhance their media portfolio and provide strategic advantages through cross-promotional opportunities. It also aligns with Rupert Murdoch's broader vision for media expansion in Australia.
Lachlan Murdoch owns just under 10% of the Ten Network and is a director of News Corp. His involvement adds complexity to the acquisition due to media ownership rules and the need to demonstrate that he and Rupert Murdoch are not related parties in a corporate sense.
Relaxing anti-siphoning laws would allow pay-TV operators like Foxtel to have exclusive live access to premier sports events. While this could boost Foxtel's market share, it might be unpopular with the public and free-to-air television networks, who currently benefit from these restrictions.
The Australian Communications and Media Authority is a key regulator that Murdoch would need to engage with to navigate media ownership laws and potentially gain approval for acquiring the Ten Network.
The current government, led by Tony Abbott's Coalition, is perceived as more favorable to Murdoch's media ambitions. This political climate might provide Murdoch with a better opportunity to lobby for changes in media regulations that could benefit his business interests.
If anti-siphoning laws are relaxed, News Corp could benefit from increased market penetration for Foxtel, as it would allow exclusive live access to premier sports events, enhancing its competitive edge and boosting its overall performance.
Potential benefits of Murdoch acquiring the Ten Network include increased media influence, potential financial gains from buying the network at a low price, and the opportunity to improve the network's performance through strategic management and cross-promotional activities.
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