The media loves a good story about itself. 2012 is just six weeks old and we’ve already had a smorgasbord of ripping yarns.
Gina Rhinehart’s Fairfax power play, which makes her the largest shareholder at the company and puts the mining heiress in a commanding position to demand a seat on the board, has provoked the most soul-searching.
Fairfax journos have been banging on everywhere you look about more than one hundred years of independence. Never mind that there were already mining interests on the board of Fairfax prior to Rhinehart’s interest; the move has stirred some strong passions.
Despite the cautious outlook in the advertising market, Rhinehart’s move demonstrates that there are always wealthy individuals who covet the political and social influence for which media assets can become lightning rods.
Elsewhere, Optus’ surprise victory in the Federal Court, when the court ruled the telco could record and transmit free-to-air television coverage of football and cricket matches over the internet to its customers, has sent tremors through the sports marketing world.
The copyright ruling has infuriated Telstra and sporting codes with exclusive digital rights deals, and rightly so in my opinion. The holders have shelled out big bucks for their content.
The conflict will rumble on for some time against the backdrop of a big year for sports content rights, with rugby league, V8 Supercars and domestic soccer competitions all due to re-sign ahead of the 2013 season.
The sports rights holders were not the only ones choking on their cornflakes this week. Nine Entertainment Co. chief operating officer and finance director Pat O’Sullivan’s sudden departure brought its huge debt burden into sharp focus.
Nine attempted to dampen speculation that O’Sullivan’s exit was linked to its financing problems, but the hedge funds that hold about half of Nine’s $2.7 billion senior debt have seized on the departure as evidence that the company’s chances of refinancing are fading.
Hot on the heels of O’Sullivan, AdNews revealed Nine reality series Excess Baggage, one of the network’s highlights at last November’s upfronts, was being taken off the main channel to live in exile on digital channel Go. The show has taken a kicking in the ratings from Seven’s The Biggest Loser and its stalwart Home and Away.
Audience ratings are always important, but the speed at which Nine has given up on Excess Baggage shows that ratings are becoming life and death in 2012. With the latest KPMG figures revealing that the advertising market is sluggish, the free-to-air networks will need to fight tooth and nail for viewers to ensure they capture their share of ad dollars and avoid uncomfortable questions about the free-to-air broadcasting model.
With the claim by Seven Network’s Tim Worner that it would “reload” the gun in 2012 looking bulletproof, and Ten on the rise with some early ratings success and a perceptible shift in market perception under James Warburton and Lachlan Murdoch, Nine is looking like the odd one out.
With media carrying some heavy debt loads after a number of big deals in 2011 and the European financial crisis still lingering, those ripping yarns look set to continue. Expect media to be front and centre in the news this year. The stakes have never been higher.
This editorial column originally appeared in the 10 February edition of AdNews. Click here to subscribe.
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