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News Corp’s acquisition ambitions could be hindered by ACCC: Michael Miller

News Corp’s ability to collect other media companies would be restrained by the competition watchdog and shareholders with their hands in a number of pockets, the organisation’s local executive chairman, Michael Miller, has contended.

Miller admitted to the crowd at Mumbrella360 that since the government’s media reforms passed, various companies had flirted with the prospect of buying and selling, but there would still be a number of significant barriers to News Corp’s expansion.

Miller presented at Mumbrella360 this morning

“At the moment there is a lot of dancing,” he said.

“[But] there are some shareholdings which are making it difficult for companies to transact.

“Particularly Bruce Gordon and WIN Group have shares across a number [of companies] that have made transactions more difficult, but I think [consolidation is] inevitable because we all survived on ad dollars a decade ago. That pie hasn’t grown – in terms of made media dollars – and the number of media competitors in the market has increased, so you are going to need to see some rationalisation.”

He also noted that the Australian Competition and Consumer Commission (ACCC) – which blocked the merger of Ooh Media and APN Outdoor on the back of competition concerns – would be another hurdle.

“We’d have an ACCC concern,” he added.

“While the regulation has changed to enable us to, we still have a regulator we have to pass through.”

The comments come as discussions in the broader media industry continue around media concentration, ownership and competition. News Corp – which is also the majority shareholder of the recently merged Foxtel and Fox Sports business – made headlines last year after its executive co-chairman Lachlan Murdoch and WIN owner Bruce Gordon launched a bid to purchase free-to-air network Ten.

Ten Network went into administration one year ago and was later acquired by  CBS.

A free-to-air TV network is not on the shopping list today says Miller, though he said ‘never say never’

However, just before Ten was acquired by CBS, the Turnbull Government passed its media reforms, which included a repeal of the two out of three and 75% audience reach media ownership rules.

Since then, News Corp has become more of a seller than buyer, selling its ‘home’ magazines to Bauer Media and engaging with potential buyers for its regional and local titles.

Pushed on whether News Corp still harboured desires for a free-to-air TV network, Miller was quick to respond: “Free-to-air today is not on our shopping list”.

“Our priority at the moment is in the [Foxtel] group: having a business which has more access to consumer and advertising revenue would be the preference,” he said.

News Corp’s Foxtel has a lot to focus on at the moment, given the $1bn deal it landed with Seven for Cricket Australia’s broadcasting rights.

But despite the high price, Miller said there is “no buyer’s remorse”.

“You always want to pay less,” he said.

Tim Worner, James Sutherland and Patrick Delany at the Cricket Australia rights announcement

“For us, there’s a lot of value not just for Foxtel but also for our newspaper businesses. We talked about collaboration earlier – cricket is a big one.”

Miller went on to explain the ability to give a year-round experience of sport across newspapers, websites and broadcast was a huge opportunity.

Publishers versus Goobook

Outside of News Corp’s internal operations, acquisitions and sales, the publisher has been involved in the ACCC inquiry into Facebook and Google.

The world is closely watching the ACCC inquiry, according to Miller

Miller pointed out the role and level of influence Facebook and Google had in market from an advertising perspective, suggesting regulation was a real possibility. He said the ongoing inquiry was a “reset” moment, noting the world was watching closely.

“As a company, we don’t necessarily support regulation, but there are roles in terms of choice that consumers need to be aware of,” he said.

“I’d love to have 95% of media in this country but it would never happen, but this is what’s happened in that particular [search] category, so it’s appropriate that the review is taking place in terms of ensuring that Australians have choice and companies have choice and that we are priced appropriately in terms of competition tax.”

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