Despite the denials, perhaps the best outcome the newspaper industry can hope for from West Australian Newspapers’ planned acquisition of Seven Group is an entity with sufficient specific mass to bid for Fairfax Media (writes Peter Coleman)
Right now, Seven chairman Kerry Stokes – who is also a major shareholder in WAN – says it's not on the agenda. After an investor and media briefing, he told 'The Australian' he was "not interested in Fairfax or any other newspaper publishers", citing the problems the company faces over making money online.
But while the focus of media commentary has been about electronic assets – newspapers of course, aren’t fashionable with shareholders – the situation may change.
Stokes has said is that Seven West Media (as the new combo is to be called) would be “strong enough and big enough” to contemplate an acquisition of “anything which would improve its position”. And of course, the 'no newspapers' position would put ownership of West Australian Newspapers on a limb.
No, the publisher of the ‘Sydney Morning Herald’ and ‘The Age’ isn’t up for sale, and has worked – through the Rural Press merger and other measures – to ensure it’s not an easy target.
But there’s no doubt its future could lie with the strength and synergies which might come through such a partnership… and the Rural Press deal – described by some as a ‘reverse acquisition’ – shows how well this might work.
As the focus turns to electronic options for newspapers and the cost of content, WAN will also need to address these costs, and a partnership with Fairfax is probably the most logical way of doing so. News Limited (publisher of 'The Australian') probably has most to lose from such an alliance.
And like 'big Kerry' before him, Stokes isn't averse to a bargain if one should happen along.
Seven West Media would bring a number of strengths to the arrangement:
• a top-rating national TV network which has successfully migrated into free-to-air digital;
• strong synergies with magazine (and newspaper) interests which deliver vertical integration to its advertising markets; and
• the personal interest of a ‘press baron’ dynasty, likely to outlive the transient nature of professional board members and career CEOs.
We’ve said it before, but we like the idea that Rupert Murdoch does what he thinks will help grow News Corporation without having to spend too much time persuading fellow shareholders. Publishing is still an industry which needs passion, and News has it in spades.
It’s sad to see Fairfax – which has huge strengths and talent – hamstrung by a strong competitor and shareholders who do not appear to understand the nature of the business. The appointment of the experienced Greg Hywood as chief executive may mark a new era, but really it’s too early to say.
WAN has been ‘single masthead in single state’, and there are a stack of opportunities for resources to be profitably shared. For years it has been in the peculiar position of having News as both a partner (in Community Newspapers) and a competitor… a problem Fairfax certainly doesn’t have!
Stokes, like almost every WA businessman, has an export mentality (where markets in the eastern states are ‘export’) and has interesting national assets including wireless broadband spectrum and of course, tractor sales and tool hire. Within Seven, there’s Yahoo 7 and stakes in Fox Sports producer Premier, Foxtel and Sky.
And, yes, newspaper proprietorship (at the ‘Canberra Times’) had a ‘been there, done that’ tick against it long before he started working up the current interest in WAN.
Despite the reported remarks, we suspect there are two metropolitan media jewels still on Stokes shopping list, and with industry consolidation back on the agenda, we hope and believe the current activities may produce more than paper-shuffling.
Bring it on!
• Pictured: A plaque in the ‘Canberra Times’ pressroom recalls Stokes’ days at the federal capital daily
• how the 'West Australian' announced WAN's plans