THE DISTILLERY: Nine lives

A jotter asks whether Nine's northern roadshow was more about image than deals, while another looks at Macquarie's surprise rise.

Nine Entertainment's drawn out battle to recapitalise is back in the spotlight amid reports its roadshows in Europe and the US have been well received. But this morning, one jotter looks beyond the company's critical debt deal and wonders whether Nine's optimistic assessment of the tour was aimed at a more immediately important sporting audience. Meanwhile, more ink is spilled as commentators anticipate a takeover of Echo Entertainment by Crown, and try to understand a strange rise in Macquarie Group's share price. And finally, The Australian's economics editor reckons he knows why Australians are such a pessimistic lot, despite our apparent economic advantage.

But first, as Nine Entertainment wraps up its international non-deal roadshow, The Australian's David Gluyas suspects upbeat signals from Nine boss David Gyngell are designed to do more than lift hopes about a new capital structure for the group.

"But amid Gyngell's optimism, there is an alternative view that the timing of the roadshow, and the fact that a deal was off the immediate agenda, was more about giving Nine directors some extra comfort on solvency. With the senior debt now a current liability, and sign-off looming for the June accounts, an audit trail leading to positive feedback from the roadshow would help soothe any directors' concerns about insolvent trading. Gyngell's relative confidence also would have been directed towards the National Rugby League. Negotiations for $1 billion in broadcast rights start soon, and the NRL will want to ensure its broadcast partner enjoys robust financial health."

Eyeing other local heavyweights, The Australian Financial Review's Chanticleer columnist, Michael Smith, examines the war brewing between Echo Entertainment and its rival and stakeholder, James Packer's Crown. He says the animosity between the two companies might leave Packer with just one option: a full takeover.

"While [Packer] admires the way Kerry Stokes tackled the board of West Australian Newspapers in 2008, upping his stake to 19.9 per cent and using creep provisions to build a stake does not look like his style, as it would take too long. A full takeover bid by Crown would also require a large capital raising, which would dilute Packer’s 46 per cent stake, something he does not want to happen. This implies Packer may sell out of his media assets, which would give him enough cash to make a play for Echo."

In the Fairfax papers, Ian Verrender questions the healthy rise in Macquarie Group's share price, despite the investment bank's mass layoffs, credit downgrades and another profit warning. After running through the good and the bad at the silver doughnut, he concludes:

"Perhaps the recent rally in Macquarie's share price partly is based on a sense of relief, that the era of reckless expansion has ended and that the group is now focused on containing costs. Perhaps it is partly because those American green shoots, which have withered many times in the past four years, may now actually start to grow. But don't expect Macquarie to reach the $98 mark of its glory days in 2007."

And The Australian's David Uren seizes on the Reserve Bank's Financial Stability Review to help explain why Australians – who are continually told that they are the beneficiaries of one of the strongest economies in the world – still feel so gloomy.

"Reserve Bank estimates show the average household's net worth fell 6.5 per cent last year and at just more than $600,000 is now 11.5 per cent below its 2007 peak before the global financial crisis. The bank's latest review of the stability of the financial system says the fall in wealth is contributing to a radical change in savings behaviour as households pay off debts, sell shares and put more money in bank deposits. Superannuation savings have not recovered since the crisis, while house prices are drifting lower, having fallen 4 per cent in the past year. The drop in wealth has undermined consumers' sense of financial wellbeing, despite healthy growth in income and relatively low unemployment."

In company news, Fairfax's Malcolm Maiden says the latest News Corp scandal will increase scrutiny of the media behemoth at a difficult time, and says there is still scope for more official probes. In the same pages, Eric Johnston picks apart a Reserve Bank warning about local lenders chasing unrealistic profits by taking more risk.

Meanwhile, The Australian's Andrew Burrell examines Woodside's "severe loss of expertise", with five senior executives resigning since the arrival of chief executive Peter Coleman in May, as The Australian Financial Review's Andrew Cleary expects Qantas to use its new joint venture with China Eastern as a test model for future tie-ups in the region. And in the same paper, Matthew Stevens attempts to explain why, after 16 months of debate, there is still no settlement between BHP Billiton and unions at the Bowen Basin coalfields.

Finally, on economic matters, The Australian Financial Review's, Jennifer Hewett uses Stockland Group's profit downgrade to launch a discussion about Australia's embattled non-resource sectors, and The Age's Tim Colebatch examines a plan by Dow Chemicals chief Andrew Liveris to harness Australia's resources sector to encourage Australian manufacturing and innovation.