Murdoch, Packer Sons to Partner for Network Ten
Pair Previously Failed in Two Media Partnerships
SYDNEY -- Will the third time be the charm for Aussie media scions James Packer and Lachlan Murdoch, who are reportedly teaming up on a new media venture, this time to take control of free to air broadcaster, Network Ten.
After Packer acquired an 18.8% stake in the network last week for AUS$280 million ($271 million), local media Friday reported that Lachlan Murdoch is looking at buying half of Packer’s stake for $150 million.
If he buys in, reports are also suggesting that he may join the network’s board, even eyeing the role of chairman. The Australian newspaper has reported that current executive chairman Nick Falloon will resign.
A Ten spokeswoman said this morning the network had no comment about Falloon’s position.
However it is believed that nominations for board positions close next Wednesday, ahead of the network’s annual general meeting on December 9.
Packer and Murdoch have teamed up twice, both times unsuccessfully in the past. They lost over $400 million as shareholders in junior telecommunications operator One.Tel in the late 1990s, while a planned privatization of Packer’s media investment company Consolidated Media Holdings in 2008, in which Murdoch proposed to take a stake, never materialized.
Certainly they have history: their fathers, Kerry Packer and Rupert Murdoch were fierce media rivals and sometimes partners.
At the same time unverified reports suggest Packer wants a shake up of Ten’s recently announced change of strategy for 2011.
That strategy includes the launch of a digital channel Eleven early next year, targeting the 13 – 29 year-old age group, with The Simpsons and Neighbours moving from the main channel to 11.
Ten then would broaden its demographic to compete more directly with the Seven and Nine networks. That strategy will be underpinned by a $20 million investment in 2.5 hours of news- programming from 5 – 7:30 p.m. each weeknight.
Ten’s third digital channels is sports channels One which has built a substantial portfolio of free to air sports rights in the last 18 months. Packer is said to want to axe One and have Ten retain its focus on the youth oriented 16 – 39 audience.
At least one analyst said this plan is risky.
"In our view, a low-cost 16-39 strategy is no longer optimal for the main channel, as these viewers are now catered for by multi-channels," Royal Bank of Scotland's Fraser McLeish said.
No mention has been made of Packer's attitude to digital channel 11 and the network’s program supply joint venture with CBS for that channel.
The Australian Competition and Consumer Commission has already said it will look at Packer’s stake in Ten. Packer also has a 25% stake in pay-TV operator Foxtel and 50% of the Premier Media Group, which operates Fox Sports.
Communications minister Stephen Conroy confirmed the anti-trust regulator is looking at the deal.
“There are some issues around competition and concentration that I think [ACCC chair] Graeme Samuel is looking at,” he said.
Murdoch meanwhile owns 50% of broadcaster DMG Radio, owner of the Nova and Classic Hits networks, and has a stake in regional broadcaster the Prime Media Group. He was recently appointed deputy chairman of Prime, a position he may have to relinquish if he joins packer at Ten. Prime is the regional affiliate of the Seven Network.