Analysts slam Clive Palmer's media plans

By By David Blight | 15 March 2012
Mining magnate Clive Palmer.

Following yesterday's news that mining magnate Clive Palmer intends to set up a blind trust to invest in media, a range of industry experts have questioned his plans and motives.

Palmer said he is looking at the media as a strong investment opportunity, but also said he is not looking to exert control over the media. He said he wishes to partner with other wealthy individuals to invest in media, but added the nature of the blind trust would ensure noone could influence editorial.

However, several industry analysts have slammed his announcement.

Fusion strategy managing director Steve Allen told AdNews, “It makes absolutely no sense. He is saying he will stand at arms length. But why invest in media assets if it is just a share play? What is the sudden new attraction if he doesn't want any influence?

“No matter what angle you look at it, it makes no sense. He's never invested in the media before, so why now? Because Gina Rinehart did it? But she has made it clear she wants a voice, she has not talked about a blind trust. I find it whimsical.”

Peter Cox, media economist and chief executive of Cox Media, was also critical of Palmer's proposal.

“If it was anyone other than Clive Palmer, maybe I could see it. But he is just so unpredictable. A blind trust? I just can't imagine someone like Palmer would do that. It wasn't long ago that he was saying he wants to have a stake in Fairfax, essentially saying he wants some control. Now he is saying he doesn't want to exert influence. It's too contradictory.

“He says he is doing it for investment purposes, but how can a blind trust be a good investment vehicle. Then he says he is doing it for the sake of bolstering the media industry, so it sounds like philanthropy, but that is certainly contradictory to his character. Look at what he is doing with football. Maybe he was having a moment of confusion.”

Pulse Markets managing director Hamish McCathie said a blind trust would be a good thing for the media industry, because it is currently hampered by so much debt. However, he said it would be a poor move from an investment point of view, because of those same debt levels.

“The only reason a wealthy individual would invest in media at the moment would be to make a play at controlling media. From an investment point of view, it's just not a good investment otherwise.”

Citigroup analyst Justin Diddams said, "If we look back through history and those that have owned media assets, there has always been another agenda outside of news and money, there has always been a political agenda. Media buys you influence. If you talk about an independent trust, the word independent is a very loose description. Anyone would use their ownership to their own purposes. Why wouldn't you?"

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