Lachlan Murdoch

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Australia Casino Wars Examined, by Greg Tingle - November 2010

Punters, entertainment and media news junkies, casino and media millionaires and billionaires, and one and all. With all the talk of the Australian media wars, we thought we would explain a little more about what they are today.

The main "war" at the moment concerns the Australian television landscape, with James Packer buying up big in Network Ten shares. Some insiders say Packer's but into Ten has more to do with online gaming and gambling than one might otherwise think. Packer historically was much closer aligned with Network Nine Australia, of which his late father owned and run, and where his long time mate and associate, David Gyngell works. Media Man http://www.mediamanint.com and Gambling911 offer up the latest on Packer VS Gyngell, and much much more on the famed 'Australian Media Wars'...incoming!

In simply terms the Australian mainstream news media landscape consists of the following mains groups:

Television, print (newspapers and magazines), radio, new media, internet / new media, and the "what will they think of next"? / others sector.

In this feature we will mainly focus on television (commercial TV), to a lesser extent pay TV (Foxtel, Fox Sports - Premier Media Group etc), and the internet, which is part of the convergent media sector. Media Man is more a convergent media company, having a number of website portals (but not owning a TV station, radio station or print publication) to help give you an idea.

David Gyngell, Packer Mate And Rival Running Things At Network Nine and PBL Media

Gyngell's rise from the Network Nine Network to running its parent, PBL Media, tells us a few telling lessons. He's extremely well-regarded by its owners (private equity firm CVC especially, which is understood to be looking to float the company on the stock market, but that date is speculation. It confirms that he's not going to be poached to run Network Ten once the share raid on its share register has settled. It once again is a wake up call for everyone what a turbulent media world is in Australia.

Gyngell is a long time friend of Packer. Packer used to be his boss at Nine but now holds 18% of Network Ten, and a half share of Consolidated Media, alongside Kerry Stokes' Seven Media Group, which has a quarter. ConsMedia has a small stake in PBL Media, a quarter stake in Foxtel and half of Fox Sports, as does Packer's other business mate, Lachlan Murdoch, in his capacity as a director of News Corp, which also just happens to own one of this down unders' 2 major newspaper groups. Murdoch's private company holds 9% of Prime television, and he is now its deputy chairman, and half of Nova's holding company, DMG Radio. As well as his responsibilities in running Nine, as chief of PBL Media, Gyngell also runs NBN Television, ACP Magazines and has a say in NineMSN, Ticketek and Sky News...which is a joint venture between PBL, Seven and British Sky Broadcasting, which is controlled by ... News Corp, now making a bid for full ownership.

Are you following?

Should Murdoch buy half of Packer's stake in Ten, its register will be dominated by a trio of two billionaire media moguls...Packer and Win Television's Bruce Gordon...and the son of one. Gyngell's elevation also shows us how competitive commercial television might be next year. Cricket tests - 20 / 20s, football codes and Aussie drama are just some of what's on the Aussie TV menu. PBL chief executive Tim Parker, who's also a partner at its private equity owner CVC, thinks Gyngell is the man to take the moguls on! Last night's statement said: "We are thrilled to have the best media executive in the country to lead the business.

The Nine Network, including Channel Nine and the Go and GEM multi-channels, are in the ascendancy in an enormously competitive environment. The performance of Nine is a credit to David and his team." Television is about to get even more competitive if Ten's news strategy weathers the storm of the Packer-Murdoch attack and it wins at least some of the audience who have traditionally switched off Ten at 5.59pm once its news is over, to watch some more on Channels Seven and Nine. With the departure of current PBL chief executive Ian Law, Gyngell's elevation is also a reminder of how critical television is to PBL's performance.

Australian TV Industry On Fire Thanks To Packer, Murdoch Jr And Gyngell...

In the fast paced tech changes affecting how news and entertainment is delivered to your television, computer and wireless watsy, there is clearly a threat to the old way of doing business. But generational change is also happening now. David Gyngell, 44, now takes the lead of one of Australia's biggest media concerns, PBL Media, owner of the Nine Network.

No longer in the hands of the powerful Packer family, PBL Media was acquired from 2006 to 2008 by private equity company CVC Asia Pacific. Its board has elevated Gyngell to chief exec because it sees him as the best man to help sell the company to investors in an expected $5 billion stockmarket float next year. Gyngell's best mate, James Packer, 43, last month spent $280 million buying an 18% cent stake in Ten and wants to revamp the network's internet strategy to make better use of the opportunities emerging. He has been keen to install Paul Bassat, 42, who co-founded the successful job search firm Seek. Bassat and his brother, Andrew, have built a $2.4bn online employment and education empire in the past decade.

Lachlan Murdoch, 39, is also eyeing a co-investment in Ten. The investments are a sure sign of confidence in traditional media that was not thought of a year back. The changes are rapid. Packer has said privately to friends he has been surprised by the success of the new multichannels Australians can access on their TVs and that have attracted new advertising. Newspapers, such as The Australian, are launching across new platforms such as the iPad and new revenue streams are opening up. The last great boom of technology in media and communication companies was in swing a decade ago. How was that for a bit of a history lesson.

Network Ten Loves Internet; Visa Versa...

Packer is thinking about Ten's news and online strategy, but Ten exec are also considering a strategy when it comes to the web. The network, which recently inked a deal to use MCM Entertainment's video platform movideo to play video on its website, typically divides full-length programs into 6 parts, which enables it to show an advertisement, dubbed a pre-roll, before each part. Yahoo7 and Ninemsn show fewer ads on their full-length catch-up TV content on their Plus7 and FixPlay services respectively.

Ten's chief digital media officer Nick Spooner said movideo technology would enable the network to experiment with new ad formats and recommend similar programs to visitors who have watched a video on the site. MCM group CEO Tony McGinn said movideo technology would allow Ten to serve videos across all digital platforms, including internet-delivered TV, or IPTV.

Ten's video views were up 31% year on year to 60 million views of premium content within 12 months, Mr Spooner said. "It provides a better experience for the audience in a range of ways," he said. "These include supporting much closer links to social networking engagement around our programs.

"From a client perspective, we currently run pre-roll advertising, and movideo allows us to trial new advertising formats."

Online video advertising is a small but burgeoning market in Australia, estimated at $25 million for the 2010 financial year, although that figure does not include video-sharing website YouTube. According to eMarketer, US online advertising revenues will grow at more than 30% a year until at least 2013, when they will be worth $US4 billion. MCM group CEO Tony McGinn said the online video platform market was worth about $480 million worldwide. MCM group, which also operates a music and media syndication business and a digital design agency, began marketing its video player to third parties in March, and is now expanding into Asia. Media Man is part of the wave of new media, will you be?

Lachlan Murdoch Prime Media Group Sells Assets...

Prime Media Group Ltd has sold its non-core outside broadcast assets amid reports its deputy chairman Lachlan Murdoch is in talks to buy half of James Packer's new stake in Ten Network Holdings Ltd. Prime said it had sold OSB Australia to UK-based Gearhouse Broadcast Pty Ltd for $8.5 million in cash and $3 million in instalments between December 2012 and December 2014. OSB Australia provides outside broadcast facilities and services for professional sporting events.

Prime will hold a 15 per cent interest in the merged OSB/Gearhouse business, which has extended its agreement with Fox Sports for rugby union coverage through to 2015. "The sale of OSB Australia continues our program of divesting non-core assets to re-focus on maximising earnings from television and radio," Prime chief executive Ian Audsley said in a statement. Prime in July sold its New Zealand outside broadcast operator, OSB New Zealand, to Sky Television Ltd and also announced the sale of Moonlight Cinema to Amalgamated Holdings Ltd. Prime will incur a $1 million impairment on the sale of OSB, but will avoid $13 million of capital expenditure that is required for OSB Australia.

The proceeds of the sale will be used by Prime to pay down debt, which stood at $96 million at the end of June when the company recorded a $54.5 million full-year net loss, a widening of its $45.5 million net loss for the previous financial year. Separately on Thursday, Fairfax reported Mr Murdoch's company Illyria Pty Ltd was likely to buy 50 per cent of Mr Packer's 17.88 per cent stake in Ten acquired last week. Mr Packer's surprise $280 million purchase marked his return to free-to-air television after years of focusing on the gambling sector.

The Fairfax reports, citing "a well-placed Murdoch source familiar with the discussions", said Mr Murdoch saw the possible deal as a "turnaround" story. A price had not been agreed upon, the report said. Ten declined to comment, while Prime was being sought for comment.

Comment was also being sought from Consolidated Media Holdings Ltd, where Mr Packer is deputy chair. Shares in Prime closed steady at 65 cents, Ten shares dipped almost two per cent to $1.50 - the same price Mr Packer paid for his shares in the broadcaster - and Consolidated Media shares were two cents softer at $3.35.

James Packer Media News...

Ten Network chairman Nick Falloon may be getting ready to leave as media moguls James Packer and Lachlan Murdoch join forces on the network and we ponder could Falloon’s loss end up as Murdoch’s gain? Meanwhile, BHP Billiton moves to squash talk that its PotashCorp bid is set to crash and burn in Ottawa.

Elsewhere, as the political offensive against the ASX-SGX merger intensifies investors may be losing faith with the exchange operators and AXA SA seals a heavyweight China deal with the world’s most valuable lender ICBC. With Ten Network Holdings reportedly set to welcome two heavyweight media moguls as its major shareholders the rumour-mill has gone into overdrive with reports that James Packer’s planned overhaul of the network may have claimed its first victim. Unsurprisingly, the unfortunate victim is reportedly the network’s executive chairman Nick Falloon.

According to The Australian, Falloon has agreed to relinquish his position after a meeting with Packer. Rumblings that Falloon’s head was on the block took hold pretty much as soon as Packer pulled of his share raid last week and The Australian reports that his departure is yet to be formalised. The news comes as media scion Lachlan Murdoch looks set to take a board seat at the network with confirmation that his Illyria Private Limited was in talks with Packer’s Prime Capital to buy 50 per cent of its 17.88% stake in Ten for around $155 million. The deal between the two moguls is expected to be finalised in a month or so and interestingly there is talk that Murdoch will not only push for a board seat but could possibly be a candidate to become Ten’s chairman.

Packer has reportedly set his sights on culling Ten’s planned foray into news and current affairs and return the focus on the low-cost 16 to 39 demographic. While the plans seem to have been broadly welcomed by Ten’s major shareholders there are detractors out there especially analysts who point out that a return to youth-friendly programming could actually end up costing the network more money and with the inception of multi-channel offerings from Seven and Nine cutting into the market the new approach may not be as successful as first thought.

Either way its great reading for the the Gambling911 and Media Man loyal following. All we can say is don't bet against Packer.

Wrap Up...

Readers... er, punters, how did you like our special Australian Media Wars Explained feature? Tell us in the forum.

If you have a bet, please bet with your head, not over it, and for God's sake, have fun.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming and offer political commentary and analysis.

Australian Casino Wars: The Art Of War, by Greg Tingle -
5th November 2010

Network Ten Nick Falloon No Fool; Likely To Dodge Board Of Directors Execution...

Network Ten executive chairman Nick 'No Fool' Falloon will avoid standing up for re-election at December's AGM.

That move is tipped to be a talking point for his new major shareholder James Packer, and friend and associate, Lachlan Murdoch.

Falloon should ordinarily be required to resign his possy and offer up his head for re-election following the expiry this year of his 3-year term as executive chairman, but his appointment late last year as MD means he will not need to stand. Are you still with us?

Under the ASX listing rules, the MD of a listed company such as Ten Network Holdings is exempt from rules requiring directors to be up for re-election at the annual meeting every 3 years.

The appointment will essentially stop Packer and his soon-to-be fellow Ten investor, Lachlan 'Lucky Money' Murdoch, from seeking to have 'No Fool' Falloon voted off the Ten board at the AGM next month.

Fellow shareholders, namely Perpetual and WIN TV owner Bruce 'Grinning' Gordon were expected to strongly support the push. If need be, push will become shove, but the extra force shouldn't be required.

In a series of meetings last week 'Our James' is understood to have requested for Falloon's immediate resignation! Falloon agreed to step aside, bust asked for a further 14 months in the role. Perhaps he's just after a few more fat pay days... aren't we all.

Ten confirmed last Monday that Falloon had agreed to transfer to a non-executive role before Packer's cunning chess move last month to spend $280 million to buy an 18% stake in the hot youth orientated network.

Packer and Murdoch are now expected to question why Falloon can retain the title of managing director after shifting more than 2 years back to a part-time role, a move that cut his base salary from $2.2m to only $1.1m. You've go to feel sorry for him (Not, as comedy creation Borat would say).

Group general counsel... legal eagle Stephen Partington confirmed that, in recent correspondence with shareholder activist Stephen 'Crikey' Mayne, Network Ten had made (good) use of the existing listing rule exemption.

Readers, we hope you're still with us in our describing of the complex 'Art Of War' tactics here.

"Following the exit of Canwest from the Ten register late last year, Nick Falloon was appointed to the role of managing director of Ten," Partington documented.

"Mr Falloon was originally appointed to Ten in the roles of executive chairman and chief executive and continues to hold these positions. On this basis and in accordance with the company's constitution and the ASX listing rules, Mr Falloon is now no longer required to retire by rotation."

A Network Ten spokeswoman declined to comment further.

Numerous insiders agree that the change could benefit the Ten board in the battle with Murdoch and Packer if the board wanted to retain Falloon.

A Media Man spokesperson said "While these maters of the Australian media wars are complex, especially pertaining to the changes afoot at Network Ten, Fallon is no fool, nor are Murdoch, Packer or Nine's Gyngell. All smart and cashed up smart cookies indeed. The media's love affair with covering media continues, and we're guilty of that also, and the global readership is just loving it and lapping up every move of the chess board. Art of war media style at its best".

The media movements have generated extra interest to potential investors and Media Man and other convergent media companies are tipped to buy into the the situation in more ways than one ala share portfolio expansions, adding yet more fuel to the fire that is the Australian media wars.

Ten Network Chairman Nick Falloon To Resign!...

Ten chairman Nick Falloon has surrendered to considerable pressure to leave the firm, advising he will go in order to make way for billionaires James Packer and Lachlan Murdoch.

The company yesterday said Falloon had agreed to resign from Ten after the AGM next month if his departure "would assist in the resolution of the outstanding issues" between the company, Packer and Murdoch.

A deep throat leaked Packer and Murdoch were still trying to obtain a 3rd board position, but did indicate they were "prepared to negotiate."

The Packer - Murdoch 'dream team' have been offered 2 seats on the board but are seeking a 3rd, understood to be for Seek chief exec Paul 'Ballsy' (MM) Bassat.

The leak also shrugged off rife speculation that Murdoch wanted to snatch Falloon's chairmanship.

Packer and Murdoch have been in negotiations with the network since the beginning of the working week.

Falloon's offer to leave Ten came days after he said he was prepared to shift into a non-exec role...reports stating he would fight for his life to remain at the company he had helped successfully run since 2002.

Ten confirmed on Monday that it had offered the dynamic duo 2 board positions following speculation Packer was preparing to offer his friend, and sometime business partner, Murdoch half his 18% stake in the company.

Crown Casino 'King Of The Castle' Packer made a cunning grab on Network Ten last month when he bought 18% of Ten's stock to become the largest shareholder at an investment of a cool $280 million, pocket change to Packer.

He has yet to speak publicly to reveal his strategy for buying into the company, but various media commentators including Media Man say it's part of his master plan to make a huge splash into online gaming and gambling, adding to his Betfair business. A convergent media aspect is understood to be on the whiteboard for gaming linking Packer media businesses to Packer and affiliate - partners online gambling products, and Packer and co are understood to have been watching the tactics of PartyGaming, bwin, Virgin Games, Aspers, William Hill, Paddy Power, Centrebet and others.

Ten advised discussions were continuing but no final agreement had been reached.

"In discussions to date, Ten Holdings has offered Messrs Packer and Murdoch the opportunity to take up two directorships on the basis that the company's board would be expanded to 10 directors," Ten said.

"The offer of two directorships to Messrs Packer and Murdoch is contingent upon their agreement that the company put in place appropriate board protocols."

Network Ten shares closed at $1.46.

They traded as high as $1.59 last month followings Packer's share-buying raid which generated massive world wide headlines and sent the industry into a spin.

Insiders agree that thus far the latest venture between Packer and Murdoch looks to be a 'dream team' pairing, unlike their previous business deal with a telco start-up that proved to be disastrous for the duo. Both have appeared to have learnt their lessons well, and are on top of the media world at the moment.

Wrap Up...

Readers... er, punters, how did you like our latest on the Australian Media Wars? Is it all part of Packer's online gambling master plan? Tell us in the forum.

If you have a bet, please bet with your head, not over it, and for God's sake, have fun.

Profile

Lachlan Keith Murdoch (born September 8, 1971), is the elder son of media mogul, Rupert Murdoch and the former Anna Torv. He resigned from his executive positions at News Corporation on 29 July 2005. However, Lachlan is still on the Board of Directors at NewsCorp and is a company consultant. Subsequently, younger brother James Murdoch is now viewed as his father's heir-apparent by the press. Their sister Elisabeth Murdoch, an able businesswoman in her own right, is married to publicity wizard Matthew Freud. Lachlan is married to Sarah Murdoch.

Biography

Lachlan Murdoch was born in London, England, but was raised in a wealthy Manhattan neighbourhood, where his father owned the tabloid, the New York Post. He received his education at the exclusive Aspen Country Day School in Aspen, Colorado, as well as Phillips Academy, in Andover, Massachusetts, and earned a bachelor’s degree in philosophy from Princeton University in 1994. During summers he would work jobs ranging from cleaning printing presses to sub-editor at The Sun and The Times. At the age of 22, he was appointed general manager of Queensland Newspapers, which publishes The Courier-Mail in Brisbane. One year later, he became publisher of Australia’s first national paper, The Australian. In 1995, he was appointed Deputy CEO of News Limited, Executive Director of News Corporation since 1996, Deputy Chief Operating Officer since 2000, Senior Executive Vice President from 1999 to 2000, and Chairman of STAR since 1995.

He has been criticised as a "rich brat" for his "poor handling" of Murdoch interests in One.Tel[citation needed], which lost the empire millions of dollars. In this venture, Lachlan worked with Australian businessman James Packer, the son of Kerry Packer. Lachlan has also been attacked for trying to "Americanise" Australian newspapers. Lachlan has publicly supported the idea of Australia becoming a republic (for example in National ABC Radio AM 8.21am interview on 22nd September, 1999).

Murdoch married Australian model/actress, Sarah O'Hare in 1999. They have two sons, Kalan Alexander, born in 2004, and Aidan Patrick, born on May 6, 2006. Prior to 2003, Lachlan and Sarah were owners of "Berthong", a house in Elizabeth Bay, Sydney, which was subsequently bought by Russell Crowe. From time to time, Lachlan and Sarah host fundraising dinners for the charity "Murdoch Children's Research Institute". Lachlan is considered to be a friend of Australian actress Nicole Kidman, New Zealand actor Russell Crowe and director Baz Luhrmann.

Lachlan has a strong personal interest in Australian rugby league. On March 30, 1995, Lachlan Murdoch was at the first Super League meeting in the Atanaskovic Hartnell offices in Sydney. He and former Broncos chief John Ribot signed up leading Bulldogs players on documents which were not legally effective.

For the year 2001, Murdoch earned a salary of au$2.59 million . In June 2005, Murdoch received the Press & Outdoor Advertising "Media Person of The Year" award in Cannes . Lachlan is one of the founding patrons (along with Anthony Pratt, Peter Lowy and Lisa Fox of an organization called "Advance", formerly known as "YAPA" (Young Australian Professionals in America).

On July 29, 2005, he announced that he would be resigning from executive roles with News Corporation and moving with his family to Australia, although he would retain his seat on the board.

After his resignation, Roger Ailes, the chairman of Fox News Channel, was named chairman of News Corp.'s group of television stations. The abrupt and unexplained departure of the 33-year-old Lachlan Murdoch apparently dashed News Corp. Chief Executive Rupert Murdoch's hopes that his son would one day take over as CEO of the global media empire, which includes the Twentieth Century Fox movie studio, the Fox television network, several satellite broadcasters including DirecTV, and newspapers in Britain, Australia, and the New York Post.

In the weeks after his resignation, however, he began a new venture, lodging applications to set up a new Australian company called Illyria Pty Ltd, in which he acts as sole director and secretary.

In February 2006, Murdoch attended the memorial service for Australian businessman Kerry Packer.

As of February 2007, Murdoch is taking part in a joint venture with swimmer Ian Thorpe in the hopes of aiding the HIV epidemic in Papua New Guinea.

Lachlan is interested in adventure sports and he is a very good sailor (having competed in Sydney to Hobart race), skindiver and spearfisher.

This article contains content from the defunct wiki, HierarchyPedia, used here under the GNU Free Documentation License

Quotes

By Lachlan

* "Good journalism is good business practice; good business supports great journalism." (Andrew Olle Media Lecture, 18 October 2002)
* "You can see here that the Australian media elite define their club through standards designed only to exclude." (Andrew Olle Media Lecture, 18 October 2002)
* "One of the problems with American newspapers is that the design, the look, and the feel lack any sort of vigor, that's a pity"

About Lachlan

* "He (Lachlan) was a gentleman, and he called to be sure that the contretemps last week was between him and the New York Daily News, not between him and me."

(Ken Auletta, writer for The New Yorker, after a story that the New York Post was losing $40 million a year), (Credit: Wikipedia).

Profiles

News Corporation

Media Man Australia does not represent Lachlan Murdoch