SYDNEY (ABC News / Pacific Media Watch): Australia's richest person, Gina Rinehart, has increased her stake in television company Network 10 while also demanding board positions at Fairfax, so what does it all mean for the media landscape?
Greg Hoy
Source: 7.30 Report | Duration: 5min 57sec Watch video
Transcript:
LEIGH SALES, REPORTER: Gina Rinehart is continuing her raid on media assets, buying another 39 million shares in the Ten Network. That news comes as Fairfax continues to hold out against demands of unconditional board representation even though she's the company's single biggest shareholder. Inside Fairfax, the ructions are continuing, as Greg Hoy reports.
GREG HOY, REPORTER: Flexing her considerable mining muscle in the media, Gina Rinehart's company splashed $20 million on a further 39 million shares in Network Ten, for a total $73 million investment securing more than 10 percent of Ten and representation on its board. But the $86 million she spent for 18.7 percent of Fairfax, Gina Rinehart still refuses Fairfax's request that she sign a charter of editorial independence in order to gain board representation she's demanding, telling ABC's Four Corners last night:
STATEMENT FROM GINA RINEHART (voiceover): Unless director positions are offered without unsuitable conditions, Mrs Rinehart is unable to assist Fairfax at this time. HPPL may hence sell its interest, and make consider repurchasing at some other time.
SIMON MARAIS, CHAIRMAN, ALLAN GRAY AUSTRALIA: We can't have 20 percent of a company, and say, "I want to tell the other 80 percent how the business should run."
GREG HOY: Gina Rinehart is Fairfax's largest shareholder; the second largest is the Allan Gray investment fund, whose chairman is Simon Marais.
SIMON MARAIS: You should have also the support of at least a majority of shareholders, and I think to get that she has to show everybody else what she will do will be in their interest, not her interest.
GREG HOY: And advertisers, amongst others, would agree.
HAROLD MITCHELL, AEGIS MEDIA PACIFIC: Australia is a good place because of the freedom of the press. If you really want to have an influence, sign it, work within and make it all work, it's just as simple as that.
GREG HOY: Restructuring at Fairfax continued at pace today with the appointment of Fairfax veteran and recent Christchurch Press editor Andrew Holden as editor of the Age, where the charter of editorial independence, he argues, remains sacrosanct.
ANDREW HOLDEN, EDITOR, THE AGE: I think it's had extraordinary value, and I can't see why you would want to drop it. What it does is it defines Age journalism.
GREG HOY: It's Andrew Holden who will oversee the Melbourne end of Fairfax's sudden urge to downsize for the digital age. Something Gina Rinehart should take much of the credit.
SIMON MARAIS: She's actually been a great catalyst, forcing the company to face up to some realities.
PETER COX, MEDIA ANALYST: What's really galvanised them into action to do something now, to fire 1900 people is really to protect the board position of the eight members of the board, because the market, even though it is changing, has not just changed in the last few weeks.
GREG HOY: Others suggest such changes at Fairfax have been planned for months. There was further debate today over Gina Rinehart's threat that unless she gets her way she may sell all of her shares in Fairfax, devalue the stock and perhaps buy them back at a cheaper price later on. The first question this raises is, is it legal to manipulate the value of shares in such a manner?
7.30 contacted commercial law experts across the country today, all of them unanimous in their view that Mrs Rinehart was acting perfectly within her legal rights. But the second question that this raises is, is this a hollow threat? And certainly the second-biggest shareholder at Fairfax thinks that's precisely what it is.
SIMON MARAIS: Look, I don't think that's something that really concerns us. If she doesn't want to be on the board let her sell the shares. All that will happen is she will push the shares down a little while, and then they will come back to where they were. That's the way the stock market works. The fact that she bought 20 percent of the company didn't push the value up. And ultimately the share price will be determined by the profits the company make. And if she doesn't get her way let her sell!
GREG HOY: A better way to get her way, some think, is to let her launch a full takeover offer.
PETER COX: If she's really serious, is make a takeover offer for the whole of Fairfax, and then, yes, she can install whatever editorial decisions she wants.
GREG HOY: So what might we expect if Gina Rinehart has her way with Fairfax? One indication may be changes made since her arrival at Network Ten even before her latest share raid.
PETER COX: I would think at Ten she's getting a far warmer reception. She's been put on to the board, she's got her mate Jack Cowan on the board with her; she's already had a little bit of success getting the Andrew Bolt show up.
GREG HOY: As her statement last night to Four Corners put it, "Mrs Rinehart suggests that the media should also permit to be published that climate change has been occurring naturally since the Earth began, not just the views of the climate extremists."
ANDREW BOLT, BROADCASTER: Check the latest data, the world's temperature last month was below average.
GREG HOY: Mrs Rinehart added that she hoped Andrew Bolt would consider doing longer programs on Channel Ten. So what does lie ahead for Fairfax?
SIMON MARAIS: As a business, the business is not losing money, it's very profitable, and it has big chunks that have very little to do with the metro papers. In fact the majority of the business has nothing to do with the metro papers where the storm is at the moment.
HAROLD MITCHELL: They've changed things as they should, perhaps a bit later, but they have done it and they've got people that stay with it. So I think it's OK as a company. Now, News is dominant and on top of it, but we've got something funny, and we need competition in Australia. You don't want one dominant player - oh, perhaps News would like that, but I think Fairfax is OK.
This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 New Zealand Licence.
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