A segment extracted below (cribbed from subscriber material in the public interest re independent media) ran yesterday in Crikey.com.au. Pascoe is a top ex ch9 reporter who got the boot for being too tough on cosy interests related to the boss or his mates. He has a very fine business mind (though not infallible). It deals with News Ltd gobbling up another media company, F. Hannan’s FPC initially public knowledge back in November as here for magazine titles
News buys magazine stable
November 10, 2006
and then suburban freebie newspapers as here like chunky Wentworth Courier, the bane of local free press in East Sydney for at least 15 years (buying out in turn start up Eastern Suburbs Messenger):
News gets regulator OK to buy newspapers
Helen Westerman, Media Reporter
January 18, 2007
By coincidence I ran into a middle aged business man (never did get his name) at Pine Street Gallery Chippendale about 6 months ago whose daughter was part of a sustainable design exhibition for UTS. We got to chatting. By chance he socialises with the owner of FPC, the Mr Hannan. He sounded credible and quite sober unlike myself (teatotal now).
I said with bravado, next time you see Mr Hannan you let him know we at AMG
publishing suburban freebies Sydney City News, City Hub, Bondi View 'are coming to get him', ho ho (as if), 'by leveraging our 3 titles with a cheaper yet still penetrating advertising rate in the same catchment from say Balmain to Marrickville to eastern beaches'. It was all pretty light hearted given their weekly thick wad of glossy adverts.
I don't for a second think Hannan had a glass jaw on the strength of my somewhat alcohol fuelled gossip to sell out to News Ltd, given everything is for sale 'at the right price', as Kerry Packer once famously said.
(AMG owner Gibbons claims he will never sell his business 'because he could never work for someone else' and there is some credibility to this given his literary academic qualifications from the USA meaning he likes being a publisher.)
The opening of the media market courtesy the Howard federal government put that price bid on FPC fully in play.
On the other hand Hannan's press business is very profitable having been built on the real estate market, and my considered view is that that market is on a long downward trajectory from now: For one reason of economic contraction of the innner city and NSW generally. But that's short to medium term for an old business like Hannan's FPC.
Another disturbing reason to get out that News Ltd might just be too stupid to realise, as greenhouse deniers, is coastal real estate is going to be hit bigger than anyone except perhaps Mr Hannan realises by the threats of climate change. How so?
Substantial sea rise of 1 to 3 metres (and that’s conservative in my view, could be 3 to 5) in the next 30 to 50 years will change civilisation as we know it. This sea rise prediction will be front ended to the economy NOW in term of market viability of 25-30 year mortgages which affects … Hannan’s business model: Who is going to take such a mortgage on something that will flood at Bondi Beach, Rose Bay (notice the golf course on a flood plain next to Bellevue Hill), parts of Centennial Park, Vaucluse harbour frontage, Double Bay?, Rushcutters Bay and any other lower lying areas I've missed.
And don't think greenies don't follow the property market. It was our poo marches late 80's that cleaned up Bondi Beach from a smelly slum for Kiwis to booming yuppie prices in 10 years. That's a big profit turnaround and one reason why I got elected as a local councillor for the Greens in 1995 to Waverley, courtesy Greiner's deep ocean outfall political strategy. It's also why the rich owe us greenies.
Which is also as an ecologist why I am so interested in crikey.com.au's report yesterday of Greenland melting at a huge rate: See link to New York Times totally spooky piece:
"The Warming of Greenland 16th January 2007"
And remember if Greenland is melting then so too is the Antarctic. God help us.
Then of course there is the question of contracting paper press circulation due to ezines and web expansion generally including crikey.com.au.
AMG is in some ways in the undertaker business, gobbling up and synthesising the suburban papers that fall over which is orthodox free market economics, a much smaller version of News Ltd. The great virtue of AMG amongst other things is that it simply is not News Ltd!
Take your pick on Hannan sell off motives: Change in media ownership rules put a healthy price in play, sunrise web media sector, climate change.
Has anyone thought to ask the owner/director of Hannan's FPC stable what exactly were the motives for selling, rather than speculating as above? That would be a good business story.
Yours truly, Tom McLoughlin (AMG distribution), editor http://www.sydneyalternativemedia.com/blog/
Jan. 18th 2007 in crikey.com.au ezine follows:
3. ACCC destroys few remaining media diversity hopes
Michael Pascoe writes:
Anyone remember Graeme Samuel’s big promise to be the guardian of media diversity? Turns out it was all nonsense – the ACCC either has no idea what the words mean or it just rolls over for Murdoch like every other arm of government.
In a very bleak day for Australian media, the ACCC has pre-approved News Ltd’s acquisition of FPC’s community papers, allowing Australia’s dominant newspaper publisher to get even bigger, handing it clear monopolies in markets that previously enjoyed competition and apparently not even considering editorial diversity in its feeble effort of going through the motions.
It’s a dire foretaste of how the ACCC will "safeguard" media competition when the Coonan Gift is promulgated.
A bunch of suburban throwaways might not be the linchpin of Australian journalism, but a very dangerous precedent has been set at a time when a reasonable person might think the ACCC should be particularly sensitive to such things.
For the moment, let’s ignore the issue of the publisher of two-thirds of Australia’s newspapers being allowed to buy another 16 titles. By the ACCC’s demonstrated thinking, it would be perfectly acceptable for News Corp to take over every paper in the country with the possible exception of just three – The SMH, The Age and maybe The Sun-Herald.
Samuel’s comments yesterday indicate the ACCC was only interested in the advertising market, not editorial coverage, in accessing the Murdoch application.
The regulator "was satisfied that sufficient advertising alternatives existed in this case to provide a competitive constraint on News Ltd". Which is not what the watch puppy was suggesting last month when it singled out Sydney’s Lower North Shore market as a particular concern.
This is a considerably bigger market than any of the country towns that excited National Party MPs for a while and it’s one that Murdoch’s Cumberland Press already dominates with the North Shore Times and Mosman Daily. FPC provides some competition though with the Northside Courier.
As Lisa Murray recalls in the SMH (but unfortunately not online), the ACCC last month said "market inquires" suggested competition between the FPC and News titles had assisted in preventing increases in advertising rates and that general advertisers would have no significant alternative to advertising with the two free newspapers.
The News lawyers and lobbyists obviously were able to convince Samuel otherwise.
Too bad about editorial difference though – it just doesn’t count. The suburbans provide residents with just about the only source of local news. In a city the size of Sydney, the Terror and SMH obviously can’t and don’t cover the many local governments except at their most bizarre.
Furthermore, with the metropolitan dailies suffering static or falling circulation, the suburbans increasingly are the only papers most people get. And they are very nicely profitable indeed.
But that doesn’t concern the ACCC. Jilted local advertisers presumably can stick flyers in letterboxes. And editorial diversity, any concept of a market in local news ideas, is not an issue.
Funny that that wasn’t what Graeme Samuel was saying back when he was providing backup for Helen Coonan. Maybe he should stick to threatening to tell Australia who sells petrol here.