Media merger rule changes pass through Cabinet

Prime Minister Malcolm Turnbull’s cabinet today approved rule changes that could open up the Australian media landscape, if passed through Parliament.

Although the potential changes are more significant for television than radio, they could still have a big effect on radio network ownership.

Communications Minister Mitch Fifield says he wants to introduce legislation as soon as possible to change the Reach and Two Out of Three rules, which date back to before mobile telephones and the internet.

Legislation is likely to go to the Government party room on March 15, then progress through Parliament after that.

“There is the opportunity to bring Australia’s media laws into the 21st century to make sure that they reflect not the analogue world, but to capture and cater for the world that we live in today,” said Minister Fifield.

Shadow Communications Minister Jason Clare told the ABC’s Lateline program that Labor supported abolishing the reach rule, but not necessarily the Two Out of Three rule. He wants the legislation looked at by a parliamentary committee.

Changes to media laws have been mooted for several years, but the immediate trigger now has been the move by all of Australia’s metro tv stations to stream their programs nationally. This live internet streaming has circumvented the regional licence area boundaries created under the old planning rules.

If the Two Out of Three rule is also lifted, then it will be even more possible for media companies to merge. That rule requires that a person must not be in a position to exercise control of:

  • more than one commercial television broadcasting licence in the same licence area
  • more than two commercial radio broadcasting licences in the same licence area.

A person must not be a director of a company or companies that are in a position to exercise control of:

  • more than one commercial television broadcasting licence in the same licence area
  • more than two commercial radio broadcasting licences in the same licence area
  • a commercial television broadcasting licence and a datacasting transmitter licence.

A person may not hold a directorship in two or more companies which between them exceed these limits. Similarly, anyone who controls a licence or licences may not be a director of another company that controls a licence or licences if control of the combination by a single person would be prohibited.

If these rules are recinded then radio, tv, newspaper and internet publishers could all be fighting it out to acquire more assets in their cities. If regional tv stations sell to the bigger players, the owners might have a chance to cash out before the value of their businesses declines, but if they try to hold on, they are looking at a much less positive outcome in the future. Bruce Gordon’s WIN TV will be of most immediate interest to radio industry watchers if the legislation passes the Parliament, since Gordon’s company also owns radio stations i98 in Wollongong and C91.3 Campbelltown.

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