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Australian Media Wars Featuring Packer and the Murdochs

Written by:
Greg Tingle
Published on:
Oct/30/2010

Punters, casino and media tycoons, millionaires and billionaires, and one and all. What a huge week it was. Casino tycoon James Packer, Rupert Murdoch, Lachlan Murdoch and friends all manoeuvring to make the most of the upcoming changes in Australian media law, following Packer share rain on Network Ten last week. Media Man http://www.mediamanint.com and Gambling911 offer up a wrap up of whats going on in the media land down under...

James Packer Media News...

Ten Network chairman Nick Falloon may be getting ready to leave as media moguls James Packer and Lachlan Murdoch join forces on the network and we ponder could Falloon’s loss end up as Murdoch’s gain? Meanwhile, BHP Billiton moves to squash talk that its PotashCorp bid is set to crash and burn in Ottawa. 

Elsewhere, as the political offensive against the ASX-SGX merger intensifies investors may be losing faith with the exchange operators and AXA SA seals a heavyweight China deal with the world’s most valuable lender ICBC. 

With Ten Network Holdings reportedly set to welcome two heavyweight media moguls as its major shareholders the rumour-mill has gone into overdrive with reports that James Packer’s planned overhaul of the network may have claimed its first victim. Unsurprisingly, the unfortunate victim is reportedly the network’s executive chairman Nick Falloon. According to The Australian, Falloon has agreed to relinquish his position after a meeting with Packer. 

Rumblings that Falloon’s head was on the block took hold pretty much as soon as Packer pulled of his share raid last week and The Australian reports that his departure is yet to be formalised. The news comes as media scion Lachlan Murdoch looks set to take a board seat at the network with confirmation that his Illyria Private Limited was in talks with Packer’s Prime Capital to buy 50 per cent of its 17.88 per cent stake in Ten for around $155 million. The deal between the two moguls is expected to be finalised in a month or so and interestingly there is talk that Murdoch will not only push for a board seat but could possibly be a candidate to become Ten’s chairman. 

Packer has reportedly set his sights on culling Ten’s planned foray into news and current affairs and return the focus on the low-cost 16 to 39 demographic. While the plans seem to have been broadly welcomed by Ten’s major shareholders there are detractors out there especially analysts who point out that a return to youth-friendly programming could actually end up costing the network more money and with the inception of multi-channel offerings from Seven and Nine cutting into the market the new approach may not be as successful as first thought. Either way its great reading for the the Gambling911 and Media Man loyal following. All we can say is don't bet against Packer.

Lachlan Murdoch Prime Media Group Sells Assets...

Prime Media Group Ltd has sold its non-core outside broadcast assets amid reports its deputy chairman Lachlan Murdoch is in talks to buy half of James Packer's new stake in Ten Network Holdings Ltd. Prime said it had sold OSB Australia to UK-based Gearhouse Broadcast Pty Ltd for $8.5 million in cash and $3 million in instalments between December 2012 and December 2014. OSB Australia provides outside broadcast facilities and services for professional sporting events. Prime will hold a 15 per cent interest in the merged OSB/Gearhouse business, which has extended its agreement with Fox Sports for rugby union coverage through to 2015. 

"The sale of OSB Australia continues our program of divesting non-core assets to re-focus on maximising earnings from television and radio," Prime chief executive Ian Audsley said in a statement. 

Prime in July sold its New Zealand outside broadcast operator, OSB New Zealand, to Sky Television Ltd and also announced the sale of Moonlight Cinema to Amalgamated Holdings Ltd. Prime will incur a $1 million impairment on the sale of OSB, but will avoid $13 million of capital expenditure that is required for OSB Australia. The proceeds of the sale will be used by Prime to pay down debt, which stood at $96 million at the end of June when the company recorded a $54.5 million full-year net loss, a widening of its $45.5 million net loss for the previous financial year. Separately on Thursday, Fairfax reported Mr Murdoch's company Illyria Pty Ltd was likely to buy 50 per cent of Mr Packer's 17.88 per cent stake in Ten acquired last week. Mr Packer's surprise $280 million purchase marked his return to free-to-air television after years of focusing on the gambling sector. 

The Fairfax reports, citing "a well-placed Murdoch source familiar with the discussions", said Mr Murdoch saw the possible deal as a "turnaround" story. A price had not been agreed upon, the report said. Ten declined to comment, while Prime was being sought for comment. Comment was also being sought from Consolidated Media Holdings Ltd, where Mr Packer is deputy chair. Shares in Prime closed steady at 65 cents, Ten shares dipped almost two per cent to $1.50 - the same price Mr Packer paid for his shares in the broadcaster - and Consolidated Media shares were two cents softer at $3.35.

Wrap Up...

Readers... er, punters, how did you like our special Australian media wars update today? Tell us in the forum. 

If you have a bet, please bet with your head, not over it, and for God's sake, have fun.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming and offer political commentary and analysis.

 

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