Paul McIntyre: Now, let the media madness begin

After 20 years the Howard Government this week finally blew up former Prime Minister Paul Keating's media regulation regime which prevented media owners from controlling more than one platform - print, radio or TV - in any single market.

But there was compromise and some great one-liners from those opposed to the deal - Labor voted against the changes in the Senate with its communications spokesman Stephen Conroy saying the rules were akin to "putting lipstick on a pig".

The historical changes got through after last minute intervention by Federal Treasurer Peter Costello this week when he proposed the pending legislation should block any company from owning print, radio and TV interests in one market. As it stood early in the week, the rules would have allowed unrestricted cross-platform ownership as long as there were "five voices" in one market.

Costello's proposal was a return to 2002 when former Communications Minister Senator Richard Alston failed in his efforts for a two-out-of-three regime. Concerned National Party MPs, however, took the Treasurer's bait and the legislation went through the Senate on Thursday. It will now make its way to the more Government-friendly House of Representatives.

Still, the Nationals had their doubters, spearheaded by the maverick senator Barnaby Joyce, who produced some cracker lines on the threat to media diversity in the new rules, particularly for regional areas.

He was adamant, for instance, that radio stations which simply broadcast music or racing didn't contribute to diversity in the same way as talkback radio.

"I just don't think the Red Hot Chili Peppers are going to change the election," he proclaimed this week. "I am more interested in Alan Jones as an opinion-maker than the Pussycat Dolls. There are changes that could still be made to this. Who wins race five at Dapto [Racecourse] does not change an election. Who the red-hot runner at Randwick [Racecourse] is, is not going to affect the governance of our nation. So they should not be determined to be a voice. We have to make sure that we protect the voices that do change the aspirations, inspirations and opinions of our nation."

Ironically, Joyce's views were aligned to the sentiment aired by Paul Keating on ABC TV this month. Keating ridiculed the changes because they meant politicians would be at the behest of more powerful media owners. He singled out James Packer's chief executive at PBL, John Alexander, and Packer's head at the Nine Network, Eddie McGuire, as examples.

"How would it be living in Sydney, say, if the PBL squad at Channel Nine, Eddie and the boys, also controlled the Sydney Morning Herald; or down in Melbourne, Channel Nine also owned the Age or Fairfax owned Channel Seven?" he said. "You'd have to keep your nose clean. You'd have to make sure, if the Packer organisation controlled the SMH, the Age and Channel Nine, you'd have to make sure that you got on all right with little John Alexander. You'd have to be in his good books. You wouldn't rub fast Eddie up the wrong way, for instance."

Democrats leader, Senator Andrew Murray, was equally scathing this week. "We are deeply, deeply distressed by this legislation," he told reporters. "Why is it better economically and politically for media concentration to be greater in this country than it was and for there to be less competition at the top level - that is the question you must ask yourself, that is the question you must ask every Liberal member and senator." Murray said he had one Liberal senator approach him to find out what the changes meant. "I can assure you that not everybody down there [in the Senate] knew what they were doing when they voted and we are deeply distressed by the outcome."

All the doubts, however, are essentially consigned to history. Although the revised rules are watered down, the changes will trigger a bout of consolidation in the A$12 billion sector - currently a TV station owner cannot own a newspaper or radio unit in the same market and vice versa and there are serious limits on foreign investment. All that will change, possibly by year's end.

Early market expectations are for companies like APN News & Media, the Ten Network, Macquarie Media and Seven Network to be acquirers and newspaper group John Fairfax, radio operator Austereo and regional TV and radio player Southern Cross to be early targets in merger and acquisition plays.

A takeover of Fairfax by Network Ten is high on the list of market expectations although many argue that a carve-up of the A$6 billion publisher by a private equity consortium is likely. The real media madness is about to start.