By Dr George Venturini*

Testing the thesis (continued)

6

(A controlled mass media)

Media ownership laws in Australia have remained unchanged for over a decade, although debate on the desirability of reform has continued – desultorily and inconclusively. This debate has been fuelled by the impact of new media technologies, a number of inquiries proposing regulatory changes, and the self-interest of those media organisations which report the controversy. Australian Governments have long indicated that the rules are anachronistic, but hardly any meaningful change has been proposed.

The declared purpose of any desired legislation is to encourage diversity in the ownership of the most influential forms of the commercial media: the daily press and free-to-air television and radio. That is the theory, the practice is something else. The intended, major effect of the laws is to prevent the common ownership of newspapers, television and radio broadcasting licences which serve the same region. The justification for the rules is that the effective functioning of a democracy requires a diverse ownership of the daily mass media to ensure that public life be reported in a fair and open manner.

The legal position is complex. Under placitum 51(v) of the Australian Constitution legislative control of broadcasting is contained in the Broadcasting Services Act 1992. Generic controls relating to commercial activity are covered by the provisions of the Trade Practices Act 1974 and the Foreign Acquisitions and Takeovers Act 1975, both as amended, and both badly administered. They are supported by the Commonwealth’s powers regarding trade and corporations under sections 51(i) and 51(xx) of the Constitution.

Australia mass media are concentrated into the hands of a very small number of proprietors. For example, 11 of the 12 major newspapers in Australia are owned by former News Limited, once a subsidiary of News Corporation Inc., which was a foreign entity controlled by Rupert Murdoch and his family.

On 28 June 2012 Mr. Rupert Murdoch announced that, after concerns from shareholders in response to its recent phone hacking scandals and “to unlock even greater long-term shareholder value”, News Corporation’s assets would be split into two publicly traded companies, one oriented towards media, and the other towards publishing. The split formally took place on 28 June 2013; where the present News Corp. was renamed 21st Century Fox and consists primarily of media outlets, while a new News Corp was formed to take on the publishing and Australian broadcasting assets.

News Corporation’s major holdings at the time of the split were News Limited – a group of newspaper publishers in Australia, News International – a newspaper publisher in the United Kingdom, the properties of which include The Times, The Sun, and the now-defunct News of the World – the subject of the phone hacking scandal which led to its closure in July 2011, Dow Jones & Company – an American publisher of financial news outlets, including The Wall Street Journal, the book publisher HarperCollins, and the Fox Entertainment Group, owners of the 20th Century Fox film studio and the Fox Broadcasting Company – one of the United States’ major television networks.

The New News Corp, trading as News Corp, is an American multinational mass media company, formed as a spin-off of the former News Corporation focusing on newspapers and publishing. The company consists primarily of the former News Corp.’s newspaper and book publishing assets; including: Dow Jones & Company, a New York City-based financial publisher, and owners of the Wall Street Journal; News UK, a British newspaper publisher; New York Post, a daily newspaper in New York City first acquired by Rupert Murdoch in 1976; HarperCollins, a major book publisher; News America Marketing, a distributor of advertising and coupon promotions, and last but not least, News Corp Australia, an Australian newspaper and magazine publisher, which also holds Fox Sports Australia and a stake in pay-TV provider Foxtel and classifieds company REA Group.

News Corp Australia – formerly News Limited – is one of Australia’s largest media companies, employing more than 8,000 staff nationwide and approximately 3,000 journalists. The publicly listed company’s interests span newspaper and magazine publishing, Internet, subscription television, market research, DVD and film distribution, and film and television production trading assets.

News Corp Australia owns approximately 142 daily, Sunday, weekly, bi-weekly and tri-weekly newspapers, of which three are free commuter titles and 102 are suburban publications – including 16 in which News Corp Australia has a 50 per cent interest. News Corp Australia publishes a nationally distributed newspaper in Australia, a metropolitan newspaper in each of the Australian cities of Sydney, Melbourne, Brisbane, Adelaide, Perth – Sundays only, Hobart and Darwin and groups of suburban newspapers in the suburbs of Sydney, Melbourne, Adelaide, Brisbane and Perth. The company publishes a further thirty magazine titles across Australia. According to the Finkelstein Review of Media and Media Regulation, in 2011 News Corp Australia – then News Limited – accounted for 23 per cent of the newspaper titles in Australia.

With interests in digital media, the company’s sites include news.com.au, Business Spectator and Eureka Report, Kidspot.com.au, taste.com.au and homelife.com.au. The company has 50 per cent stakes in CareerOne.com.au and carsguide.com.au, a share in REA Group which operates www.realestate.com.au, as well as websites for most newspaper and magazine titles. The company’s other Australian assets include all of Fox Sports Australia, 50 per cent ownership of subscription television provider Foxtel and shares in the Brisbane Broncos NRL team.

Until the formation of News Corporation in 1979, News Limited was the principal holding company for the business interests of Rupert Murdoch and his family. Since then, News Limited had been wholly owned by News Corporation. In 2004 News Corporation announced its intention to reincorporate to the United States. On 3 November News Corp Limited ceased trading on the Australian Stock Exchange; and on 8 November News Corporation began trading on the New York Stock Exchange. On 28 June 2013 News Corporation was split into two separate companies. Murdoch’s newspaper interests became News Corp, which was the new parent company of News Limited. News Limited was renamed News Corp Australia following the listing of the new News Corp on 1 July 2013.

News Corp Australia’s holdings include Queensland Press Ltd., jointly owned by Cruden Investments – Murdoch’s own company – and News Corporation. Other News Corp Australia media interests are A.A.P. Information Services – jointly controlled with Fairfax, a 25 per cent stake in Foxtel – pay TV, and News Interactive – an online service.

It was thought until a few years ago that, in terms of its share of circulation, News Limited had: 68 per cent of the capital city and national newspaper market, 77 per cent of the Sunday newspaper market, 62 per cent of the suburban newspaper market, and 18 per cent of the regional newspaper market.

During the electoral campaign leading to the 2013 election, then briefly Prime Minister Kevin Rudd said that “Mr. Murdoch is entitled to his own view … he owns 70 per cent of the newspapers in this country.” This statement is factually incorrect. As already noted, according to the Finkelstein Review of Media and Media Regulation, in 2011 News Corp Australia – then News Limited – accounted for 23 per cent of the newspaper titles in Australia. In a rebuttal of Mr. Rudd’s claim, a person from The Australian observed that News Corp Australia accounts for 33 per cent of the newspaper titles which have sales audited by the Audit Bureau of Circulation.

But Mr. Rudd’s claim had more validity if one would focus on newspaper circulation. Many of the newspapers listed are highly localised and have small circulations.

News Corp Australia titles account for 59 per cent of the sales of all daily newspapers, with sales of 17.3 million papers a week, making it Australia’s most influential newspaper publisher by a considerable margin.

Among capital city and national daily newspapers, which are by far the most influential in setting the news agenda, News Corp Australia’s titles accounted for 65 per cent of circulation in 2011. Fairfax Media, the next biggest publisher, controlled just 25 per cent. Those figures may have shifted slightly since then, but there is no doubt that News Corp Australia is Australia’s most dominant player – it owns 14 of the 21 metropolitan daily and Sunday newspapers.

An International Media Concentration Research Project, led by Professor Eli Noam of Columbia University, found that Australian newspaper circulation was the most concentrated of 26 countries surveyed, and among the most concentrated in the democratic world.

Two newspaper owners – News and Fairfax – accounted for 86 per cent of newspaper sales in Australia in 2011, as compared to 54 per cent for the top two newspaper owners in the United Kingdom and a lowly 14 per cent for the top two in the United States.

Whether that translates into political influence over governments and the electoral process is beyond question. But it is important to note that this concentration of newspaper circulation is present at a time when the overall number of newspaper sales is declining. Newspaper sales per 100 Australians were 9.7 in 2011, as compared to 21.9 in 1987 and 13.0 in 2000.

The major reason for this decline is the migration of news consumption to the Internet, where news.com.au and other News Corp sites face stronger competition from ninemsn, Yahoo!7, Fairfax Media, the A.B.C., and other sites such as The Conversation, Crikey, On Line Opinion and Guardian Australia. The extent to which some of these sites either gather original material, or have the influence of the News mastheads, is certainly debatable, but the online news environment is far more diverse than that for print newspapers.

Tomorrow: Testing the thesis . . . A controlled mass media (continued)

* In memory of my friends, Professor Bertram Gross and Justice Lionel Murphy.

Dr. Venturino Giorgio Venturini devoted some sixty years to study, practice, teach, write and administer law at different places in four continents. In 1975 he left a law chair in Chicago to join the Trade Practices Commission in Canberra. He may be reached at George.Venturini@bigpond.com.au.