Media ownership and control: the next stepby Paul SheehanNews Weekly
, September 21, 2002
Paul Sheehan briefly explores the recent history of media ownership laws in Australia, the arguments for both deregulating and maintaining the current laws, what is meant by 'control', and a basic outline of who has control within the various media
In August 1985, a government study was undertaken to look at the ownership and control laws of commercial television which resulted in limits on cross-media ownership. In 1986 the Government proposed changes, which led to the Broadcasting (Ownership and Control) Act 1987;
this included restrictions on the size of audience reached by an owner and the number of different media types allowed to be owned by the one parent body.
This, it was hoped, would support competition policy, discourage concentration of media ownership in local markets and enhance public access to a diversity of viewpoints.Restrictions
Further regulations were outlined in the Broadcasting (Ownership and Control) Act 1988. This introduced similar restrictions into the radio broadcasting media.
Other minor changes were related in the Broadcasting (Ownership and Control) Act 1989
, which amended provisions relating to cross-media ownership of television and radio licenses, the Broadcasting Ammendment Act (No.2) 1990, the Broadcasting Amendment Act 1991 and the Broadcasting Services Act 1992
The cross-media rules were introduced to prevent common ownership of commercial radio, television or newspaper outlets within the same licence area.
They say that a person must not be a director of a company in a position to exercise control of a commercial television broadcasting licence, while also director of a company in a position to exercise control of a commercial radio broadcasting licence within the same licence area.
The same restriction applies between either of these and an associated newspaper.
A person must not exercise control of commercial television broadcasting licences in an area with a population that exceeds 75% of Australia's total. More than one commercial television broadcasting licence in the same area, or more than two commercial radio broadcasting licences in the same area are not allowed.
A person may not hold a directorship in multiple companies which between them exceed these limits.
The laws also restrict foreign interests. Control of a commercial television broadcasting licence and company interests which are foreign must not exceed 20%.
The rules governing who has ownership and control of a company are extremely complex. The Broadcasting Services Act 1992
(Schedule 1, Part 1, (1) Control, p267).states:
"The holding of company interests is not the only way to be in a position to exercise control. Clauses 2 and 3 set out the rules for deciding when a position to exercise control exists.
"While company interests may be important in deciding that question, they are only one issue.
"In some cases, it may be important to look at agreements and arrangements between people and at accustomed courses of conduct between people."Exception
The Act contains a "15% Rule", which explains that if a person has interests in a company exceeding 15%, then that person is deemed to be in a position to exercise control. An exception to this rule occurs when a person can be in control where he/she owns 10% of a company and no one else has ownership of more than 2%.
A holding of 51% may not necessarily denote ownership if the holder had given undertakings to a lender; in such a case, the lender may exercise control.
Tracing ownership and determining someone's holdings in a company as a percentage is calculated by the multiplication of fractional holdings in the chain of companies having interests.
Person's % of Company C =
(Person's % in Company A)
x (Company A's % in Company B)
x (Company B 's % in Company C)
This calculation can extend to any number of companies.
When the Coalition came to power in 1996, it was committed to remove the cross-media rules which limit cross-ownership between print and broadcasting services. Emerging technologies that integrate television, telecommunications and internet fall outside the scope of the cross-media laws.
The belief is that these new technologies are maintaining diversity despite the laws, that the current laws were inapplicable in many cases involving new technologies and that the laws do not consider converging services.
However the Australian Bureau of Statistics reveals that much of the new media styles are controlled by traditional media owners, hence concentrating markets.
The most popular Australian internet news sites are controlled by existing media operators, Publishing and Broadcasting Ltd (PBL), News Ltd, Fairfax and the Australian Broadcasting Corporation.
Furthermore, the majority of people still rely on the traditional sources of media for their news. Internet news sites are usually only successful when linked with a traditional media form such as a newspaper.
From a business perspective, the media has always been regarded as unique as it is comprised of private companies with public responsibilities. Many fear that concentration of media would concentrate power, restrict variety of opinion, reduce competition and diminish local content.The Global Media Giants
There are seven major companies that control, in part or entirety, the majority of media organisations around the world. They are News Corporation; Viacom; Walt Disney; AOL; Time Warner; Bertelsmann; Vivendi Universal; and Sony.
Complex business relationships exist between small media bodies, which often sit under the same larger corporation.
News Corp, based in Australia and controlled by Rupert Murdoch, has media holdings in the US, Canada, Europe, Latin America and Australia.
In late 2000, it had assets of around $38 billion with total annual revenues of about $14 billion. It controls various bodies right across the spectrum of media; Twentieth Century Fox, Fox News and Broadcasting, The New York Post
, The Times
and The Sun
in the UK are some of the most popular.
In Australia it has an interest in over a hundred national, metropolitan and regional newspapers through its subsidiary, News Ltd.Control and ownership
News Ltd dominates the newspaper market with ownership of seven of the nation's fourteen metropolitan dailies, accounting for 60.7% of the total circulation. In addition, it also has the largest circulation in seven of the nine markets (capital cities plus national). Only Canberra and Perth have a non-News Ltd monopoly.
In regional Australia, the newspaper market is mostly dominated by Rural Press Ltd, John Fairfax Holdings and APN News and Media. The Western Australian market is entirely controlled by West Australian Newspaper Holdings.
Magazines in Australia are largely owned by either PBL or APN News and Media.
The suburban market in the major capital cities of Melbourne and Sydney is dominated by News Ltd and Fairfax. In Perth, West Australian Newspaper Holdings and News Ltd hold the majority of control, Adelaide is entirely controlled by News Ltd, Canberra by Rural Press and Darwin by News Ltd. Hobart has no suburban papers.
Ownership in the Radio Broadcasting markets is very complex with some stations being jointly owned by up to 50 different companies. Major companies in control include PBL, APN News and Media, and Southern Cross Broadcasting.
While it is necessary to amend the Act to consider the new forms of media that have emerged in recent years such as subscription television and to account for the convergence of telecommunications, broadcasting and internet, diversity will not be preserved by removing the current restrictions.
This is particularly evident given that Australia's media is still mostly owned by a few large corporations.