Issues around media concentration in Australia

What stands out when looking at journalism in Australia?

If looking first at print, the answer is clear. Australia has one of the most concentrated news-media industries in the world, dominated by just a small handful of companies, consolidating their power to create market monopolies and influence the political process.

What can be done? I speak with Erik Jensen, Editor-in-Chief at Schwartz Media and Corinna Hente, Sub-Editor at the Saturday Paper about these issues. Watch the video on Vimeo here.

There were 21 masthead owners in Australia during the 1920’s, today, just two media corporations control nearly all news mastheads.

Many of these daily newspapers stand unchallenged, circulating to millions of Australians, rendered largely unaccountable for what they publish by a glaring lack of competition and enforceable regulation. Only Melbourne and Sydney have more than one daily masthead.

For decades, they have campaigned to abolish the ownership rules that protect media diversity in Australia. For decades the public and the experts have pleaded for stronger regulation, but Australian media is now more concentrated than ever.

What about audiences?

Corinna Hente points out audiences are deserting this concentrated mainstream media “in droves”. “The vast majority of people don’t see themselves in the publications anymore.”

Hente points to the shift in audience values, shown in the May federal election result, where “large papers” are functioning more as political actors than new services, leaving their traditional audiences behind. “In many respects a lot of stuff that comes out of these papers have an audience of one, the political party that’s in at the moment.”

Hente likens traditional media to lobby groups: “They they have power, they have money. they offer something in return for services.” However, despite the success of such transactional approaches to shaping the political landscape, Hente sees that the power of mainstream media is declining, not just due to the loss of audiences, but also to the lack of diversity.

“Once there’s no diversity it all gets very boring and I think that’s actually one of the reasons people are turning their backs on on traditional media so much.”

“I’m not convinced that there is a strong role for government in encouraging diversity of media. I really think that the way new titles should emerge is by finding and serving audiences. There is a really important tethering of good journalism to good readers.“

– Erik Jensen, Editor-in-Chief, Schwarz Media

To understand how concentrated news ownership has now become in Australia, we have to go back to the late nineteenth century. The high literacy rates of Australian colonies meant newspapers became the most common form of reading. 

In his 1883 book, Town Life in Australia, Richard Twopeny said “Excepting the Bible, Shakespeare and Macauley’s ‘Essays’, the only literature within the bushman’s reach are newspapers.” This meant that Australian newspapers were profitable, and important. 

“This is essentially the land of newspapers” Twopeny said,  “… if there is one institution of which Australians have reason to be proud, it is their newspaper press.” 

By the 1920’s there were hundreds of newspapers across Australia, including 26 daily masthead papers. At this point Australian media was considered to be its most diverse.

In 1921, Sir Keith Murdoch became editor of the Herald and Weekly Times newspapers, and in the following decades he set sail on a course of expansion. In 1925 the company bought Melbourne’s Sun News-Pictorial and in 1929, The Adelaide Advertiser. The Advertiser then bought a stake in The News, an Adelaide paper published by News Limited, in 1933, along with Radio 3DB now KIIS 101.1. Keith Murdoch himself purchased a controlling share of the paper in 1949. 

After his father’s death three years later, Rupert Murdoch, just 21 years old at the time, inherited his father’s share in The News and became a member of the News Limited Board. Rupert had admired his father greatly.

News Limited was established in 1923, originally funded by large mining interests grouped at Collins House for the purpose of propagating anti-union news, with two local papers.

“I am glad to note that you are going to shake the Port Pirie Recorder up. There is great room for propaganda in Broken Hill and Port Pirie … Let us try and educate our men, and the public too.“

– WS Robinson, Fmr Editor, Melbourne Herald in 1918, writing to Colin Fraser, Broken Hill Associated Smelters

– Quoted by Professor Sally Young, The Conversation, 2019

Murdoch’s great success with The News’, allowed News Limited to buy up other papers – the Sunday TImes of Perth in 1956, through other capital cities to establish a major foothold in Sydney in 1960 with the Daily Mirror.

Inventing the tabloid

Despite saying many times that the newspapers wouldn’t see journalistic or editorial changes come as a result of his ownership, Murdoch did indeed transform these newspapers, taking them in a new populist direction. By this point, Murdoch is credited with almost single handedly “inventing the tabloid” and was noted for his “hands-on”, “micro-managerial” approach to leadership.

By the 60’s, the popularity of the new daily tabloids allowed historian Ken Inglis to remark “Australians are more intensely addicted to daily newspapers than almost all other people in the world”.

1964 saw the establishment of the Canberra based The Australian, Australia’s first daily national broadsheet, increasing News Limited’s political influence and respectability.

In 1986, under Hawke and Keating, the longstanding “two-station rule” under which an owner could control a TV station in only two markets in Australia was abolished. Under the new plan owners would be allowed stations in any number of markets so long as the combined audience reached did not exceed 75% of the total population. 

The Cabinet introduced cross-ownership limits that prevented companies from owning electronic media and newspapers in the same market.

Famously, Paul Keating said media owners could be queen of the screen or prince of print, but not both. 

Within days of the announcement, Murdoch launched a successful bid for the Herald and Weekly Times, the company his father, Sir Keith, had helped to build, which would net News Limited a raft of metropolitan dailies and community newspapers. 

Five days later, the Hawke cabinet, known to be heavily criticised by the Herald and Weekly times “noted ” that the timing of its decisions and Murdoch’s takeover bid was “simply a coincidence”. Later that year, the Trade Practices Commission would say the acquisition didn’t create market dominance, an extraordinary finding, given the cross media ownership.

“The winners consolidated their gains in the wreckage afterwards… [The new laws] “led not only to less diversity but also to exploitation ..More metropolitan papers were closed in the few years after the upheaval than had been closed for many decades before it.”“

– Paul Chadwick – The Guardian 2014

Halfway across the world, Murdoch press workers would soon be demonstrating outside the News International Printing Plant. 

The Wapping dispute was considered a significant defeat for the British trade union movement and resulted in the sacking and arrests of thousands of Murdoch press printers and journalists. The dispute’s significance lies in the demonstration of the immense political and economic muscle of Murdoch’s media empire, as a huge police presence would ensure that not a single day of production by the replacement workforce was lost.

Cross-media ownership rules

In 1996, the then Opposition Leader, John Howard, was rumoured to have reached an understanding with Kerry Packer to remove the cross-media ownership restriction which had meant he had been prevented from buying Fairfax. Later, Packer appeared on his Nine Network to endorse John Howard for Prime Minister.

John Howard and the Coalition won in 1996. Murdoch threatened to fight any attempt to change the foreign ownership rule and give Fairfax to Packer without the abolition of foreign ownership restrictions at the same time. In Howard’s second term, an agreement was reached to change both rules and the Howard cabinet eventually passed another round of media regulation changes in 2007.

The foreign ownership rule, previously capped at 25%, was scrapped entirely. The cross-media rule was also changed to allow two out of three media types to be owned in a particular market.

As expected, companies like Nine and Seven sold large swathes of their shares to foreign investment firms in order to raise funds to purchase other media assets.

Kerry Stokes, the owner of Channel Seven bought the West Australian newspaper group. This meant Stokes not only owned the TV station in Perth, but also the daily newspaper and the regional, community and online newspapers that came with it in Perth.

Fairfax continued to fend off various takeover bids from Kerry Packer. However, in 2012, the financial strain of decreasing advertising revenue would cause Fairfax to lay off 1900 employees, place paywalls around the Age and Sydney Morning Herald websites, close its two printing plants and subsequently switch to tabloid format. 

Earlier that year, The Finkelstein inquiry into Australian media, spurred by the similar Leveson inquiry into the UK media following Murdoch’s 2006 phone-hacking scandal, recommended abolishing the Australian Press Council and establishing an independent statutory body that would oversee all media platforms instead.

Fairfax Nine Merger

2016 and saw the Turnbull government announce the most recent major changes to media regulation in Australia to be implemented in 2017. The policies scrapped the cross media and audience reach rules entirely. A year later, Nine entertainment would merge with the Fairfax media company.

It was clear Nine’s main interest in the takeover was not Fairfax’s newspapers or radio stations, but its real estate platform Domain.com and its movie and TV streaming service, Stan. It raised concerns that the journalistic integrity of Fairfax’s publications and their ability to scrutinise Nine would be diminished greatly. Moreso, there were concerns that the political bias of Fairfax’s reporting would be affected by Nine’s appointment of Peter Costello, the longtime Liberal Deputy leader and treasurer to be its chairman.

The ACCC would ultimately not oppose the media merger, saying that while the merger would reduce the number of companies intensely focused on Australian journalism from five to four and would lessen competition, it would not be substantial enough in any market to breach the competition and consumer act.

“The truth never slows down a Murdoch story. The concentration of his ownership, his ability to financially sustain loss-making papers such as The Australian, and the way in which broadcast media relies on his titles for their content still enables Murdoch to set the country’s agenda.“

– Kevin Rudd, The Saturday Paper, 2022

So what has changed as a result of the concentration of media ownership in Australia?

The Australian news-media is far less diverse now than it was 100, 75, 50 or even 35 years ago.

Today, it is estimated that three companies, News Corporation, Seven-West Media and Nine-Fairfax, control 98% of commercial news-media in Australia. There are fewer journalists working today than ever. The journalists’ union, the MEAA, estimates over 5000 Australian journalists have left the industry in the past decade. While a lot of this can be blamed on the COVID-19 pandemic and rising prominence of the internet, organisational shrinkage and cost-cutting historically brought about by newspaper mergers and acquisitions are also to blame, as newsrooms slow or halt hiring of news cadets and push for redundancies of senior journalists with higher salaries. 

In particular, regional journalism has been hit hard, where over 200 local and regional newspapers in Australia have shuttered over the last decade, causing large parts of Australia to become so-called “news deserts”.

But for some, it hasn’t been all that bad… Companies like NewsCorporation, Seven and Nine have boasted huge profits in recent times. But if these media companies are making a killing, why have journalists taken pay cuts and suffered rounds of redundancies? Where’s this money going?

Well, Australian media executives have always been well-off, but their pay-packets, dividends and stock holdings have become increasingly bloated in recent years. Crikey reported in 2019 that the CEO of News Corporation, Robert Thomson, was paid a salary well over $20M, a 12% increase from the year prior and over 200 times what NewsCorporation employees are paid on average.

Forbes estimates that both Rupert Murdoch and Kerry Stokes have doubled their personal fortunes over the past decade to the tune of approximately $20B and $4B respectively. Before he died in 2005, Kerry Packer, the previous owner of Nine Entertainment was estimated to have a fortune of $6.5B. 

In 2021, Michael West endowed News Corporation Australia with the Lifetime Achievement Award in his list of Australia’s top 40 Tax Dodgers for having paid 0 tax over six years despite $16B in income. 

Australian news conglomerates have been able to wield their political and economic influence to campaign for legislation and political decisions that benefit their business interests, like the deregulation of media ownership laws or the news-media bargaining code of 2020, which would compel Google and Facebook to pay media companies for their news.

In 2020, former Prime minister Kevin Rudd began campaigning for a Royal Commission into the Australian news-media, in particular, aiming at Rupert Murdoch and News Corporation. Rudd’s petition gained over 500,000 signatures, making it the largest parliamentary e-petition to date, beating out the 2019 petition for parliament to declare a climate emergency with 404,000 signatures.

A year-long Senate Inquiry into media diversity was initiated and eventually recommended a judicial inquiry with the powers of a royal commission into media regulation and concentration in Australia, more consistent funding for the ABC and SBS and like the Finkelstein Inquiry 9 years prior, to make a new, independent body in charge of all media.  

It was, however, missing key recommendations that public experts had been making for years, such as reinstating the ownership cap on media industries