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Packer's brave new world of media self-interest


Packer BackThere was much surprise last week when billionaire businessman James Packer paid $280 million for an 18 per cent share of the ownership of the Ten Network. 

During the five years since his father's death, he had sold many of the media properties his father had accumulated. He believed he could make more money owning casinos.  

Last week's purchase seemed to suggest he is a shrewd businessman who is only in it for the money. A day or so after making his play, he was already $20 million ahead. Ten declared an unexpected special dividend on top of its final payout following the announcement of a massive and unexpected profit increase.

There was credible speculation that Packer would seek seats on the board, and use his influence to kill innovation at the network. This included cancelling a planned expansion of news and current affairs, and also the costly niche sports channel One HD, which was launched in early 2009.

The latter move also raises competition concerns, as it would remove a key competitor to the sports channels of the pay TV company Foxtel, which Packer partially owns with Rupert Murdoch and Telstra.

For his father Kerry Packer and grandfather Sir Frank Packer, being a media proprietor was effectively a vocation. They took seriously the media's obligation to serve the public interest, in the hope that they may be rewarded with large profits for their businesses. But nevertheless they had a sense of stewardship, and appeared content in the knowledge that they were doing the right thing by their nation.

Broadcast television and radio is especially tied to the public interest because, unlike print and internet media, it uses the airwaves, which are a public property. No media proprietor has an automatic right to the broadcast spectrum.

Use of the airwaves comes with certain regulatory and moral obligations, according to the Broadcasting Services Act 1992, which is administered by the Australian Communications and Media Authority (ACMA). Owners need a licence to broadcast, and they must continually prove their fitness to broadcast at licence renewal time.

In return, governments have often shown sympathy for media owners during tough times. Last year Communications Minister Stephen Conroy returned $500 million in licence fees to the commercial television networks because he believed the broadcasters had a bleak business outlook because of looming competition from internet television.

While the move was much criticised at the time, and now looks quite ill-judged in light of large increases in advertising revenue, it does demonstrate that there is a public service dimension to the activities of the commercial broadcasters.

For many years, Kerry Packer carried the financial losses incurred by Channel 9's Sunday program because he believed in the important contribution its quality journalism was making to the strength of Australian democracy. Not long after James took over from his father, the program was gutted, and soon replaced by a lifestyle oriented breakfast program. 

In recent years, Ten has distinguished itself from its rivals Seven and Nine by taking risks that are rare in commercial media. The niche sports channel was never expected to be instantly profitable, but it contributed diversity to the offering of free to air television. 

This contrasts with the predictably popular content of the new digital channels of Seven and Nine, which has contributed only increased profits. As a more public-spirited proprietor, Kerry Packer would have given One HD many years to prove its worth. Seven and Nine, whose ownership is dominated by private equity firms with no philosophical commitment to broadcast media, were only interested in reliable profits.   

Because previous media proprietors operated with a certain amount of good will, ACMA and its predecessors have rarely used their powers to enforce licence conditions, or to deny licence renewal. It could be time for ACMA to use its power to ensure that Packer's return to significant media ownership is in the public interest.

Michael MullinsMichael Mullins is editor of Eureka Street. He also teaches media ethics in the University of Sydney's Department of Media and Communications.

Topic tags: Michael Mullins, James Packer, Channel Ten, Ten Network, Channel Nine, Kerry Packer



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Existing comments

Let's hope Packer does not try to eliminate "Mass for you at Home" the longest running religious programme in Australia.

Hoss | 25 October 2010  

I wonder whether Mr. Packer is planning to promote online gambling on the new Channel 10, directed to his own betting agency of course.

Phil | 28 October 2010  

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