Online media companies are the best way to preserve the freedom of our press. The Government should listen.
It’s hard to imagine that the ambition of the world’s richest woman, iron ore tycoon Gina Rinehart, to control Fairfax Media represents a threat to Australia’s democracy. But the fear is far from an idle one.
Fairfax Media has provided an important counterbalance to the other dominant player in the Australian media scene, News Ltd, and its strong editorial line on politics and major social issues. The loss of that balance would radically alter the type of news and opinion Australians need to make sound political judgments.
Ms Rinehart’s bid comes at a time of genuine creative destruction for the media industry. Recent announcements of editorial job cuts at both News and Fairfax reflect what appears to be the long term restructure and downsizing of the industry.
Yet these same technologies may also provide enterprising capitalists with the optimism to face the lowering storm confronting Australia’s major media players.
The Federal Government is in a good position to encourage, through its response to the Finklestein report into the media, greater diversity of ownership and free expression in the media.
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Ms Rinehart is now the largest shareholder in Fairfax Media, Australia’s most respected and independent source of news. She and her company, Hancock Prospecting, are also a frequent subject of Fairfax articles, such as her struggle with ASIC over the filing of her accounts and her High Court battle against her children.
Never one to allow her will to be thwarted, Ms Rinehart is now demanding a greater say in the company’s affairs. She wants a couple of seats on the Fairfax board and a greater say in editorial policy.
She and her spokesman John Singleton have so far been unresponsive to signing up to Fairfax’s charter of editorial independence, signalling they intend to change the way Fairfax papers deal with major issues such as the mining tax and global warming.
Her actions caused widespread concern across the different parties with the (not necessarily pro-Fairfax) Treasurer Wayne Swan stating that it “has very big implications for our democracy” and Shadow Minister for Communications Malcolm Turnbull writing “if the objective of Rinehart is to exercise influence, it may be at odds with the shareholders’ interest in maximising the value of the company.”
Fairfax, of course, is the publisher of Australia’s most independent newspapers, notably the Age, the Sydney Morning Herald and the Australian Financial Review.
The company is no stranger to colourful owners, counting among them the felonious Canadian Conrad Black who gained control of the company after Warwick Fairfax’s ambitions came crashing down in the late 1980s.
But where Mr Black failed, Ms Rinehart’s sheer wealth will enable her to stay the course. Founded on one of the world’s largest iron ore deposits and fuelled by one of the greatest mining booms in history, it is unlikely to wobble in the same way that Mr Black’s shaky empire once did, and which led to him selling his share.
If this shareholder battle is anything like her protracted battle with her stepmother Rose Porteous, Ms Rinehart’s interest in Fairfax Media could well be for the long term.
As the symbol of Australia’s newly rich mining sector, Ms Rinehart and her fellow mining barons have been stung by the mining tax imposed on them by the Gillard Government.
The mining industry has orchestrated a furious campaign to defeat the tax from its first incarnation, when former prime minister Kevin Rudd proposed it; and now that it will be law from 1 July, they are still fuming.
Ms Rinehart has the additional grievance of sensational media coverage of her family life, especially her bitter struggle with her children over the family trust. This unresolved dispute threatens to reveal family secrets that Ms Rinehart would no doubt prefer to leave unreported.
Can you imagine an Australia where its most respected newspapers would not investigate or report on the affairs of not just its richest woman but also perhaps her rich friends?
Treasurer Wayne Swan says he is concerned, but admits it’s difficult to block commercial transactions like this and that there was no “instantaneous solution. “There are limits to what the Government can do,” Mr Swan said this week. “The fact is that Ms Rinehart has a right to buy shares and takeover the company.”
Mr Swan wisely reminded his audience that the Government is sitting on a report it commissioned into the media. But whatever the conclusions of that report, the Government is unlikely to grant itself or some regulatory body the bald right to block a private citizen from buying a media company.
Instead, the Gillard Government might try to explore what it can do to support new players in the online media sphere which are not controlled by huge, vested interests.
These new players are only set to proliferate here, as we have seen in the US, where the opinion site Huffington Post has now more unique online users than the New York Times.
While not yet in the space of the hard, expensive work of reporting, such online alternatives lessen the threat of individuals like Ms Rinehart to our democracy, and mitigate the need for the heavy-handed intervention of the state in media buyouts.
When you’re dealing with a $29 billion cowboy, like Ms Rinehart, the new frontier of the wild west of the internet might be the only hope we have.
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