BotW: Kicking the can on the News Media Bargaining Code; Uncertainty guaranteed for News Corp; The InterCom combo; a tiny green shoot for K+J

Dec 14, 2024

Welcome to Best of the Week, kicked off on board QF1267 home to Tasmania after what will hopefully be my last Sydney trip of the year.

It was the week where all the last-episode-of-the-season plot threads came together. The government revealed a complicated new mechanism to make the platforms fund the news industry (and conveniently kicked the can down the road on whether to designate Meta, until after the election). Omnicom announced it’s buying Interpublic in a move which will create a new holdco giant. And a legal decision means Rupert Murdoch has no certainty over who will run the empire after his death.

Happy Pick A Pathologist Pal Day for yesterday.

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An inventive incentive?

The government threaded the needle this week. By announcing the News Bargaining Incentive, they successfully avoided making a decision on whether to designate Meta under the News Media Bargaining Code, and kicked the can down the road until after the election, when it’s likely to be somebody else’s problem anyway.

Thursday’s announcement from Treasury minister Stephen Jones and communications minister Michelle Rowland promises yet another mechanism, to replace the News Media Bargaining Code which was legislated but not yet implemented.

The policy would see platforms which bring in Australian revenues of at least $250m per year pay a levy unless they offset that by entering commercial deals with news publishers.

A public consultation paper will be issued “early” next year. Unless it’s one of those laughable three-day consultations of the type accompanying last month’s social media age legislation, that pushes the process well beyond the election.

This new policy doesn’t offer an obvious mechanism for the biggest flaw of the previous policy. Meta and Google were able to decide for themselves who they wanted to negotiate with. For the big publishers that was fine, but for the small end of town, where could they even begin?

As publisher Scott Purcell pointed out on LinkedIn: “Smaller publishers like Man of Many don’t exactly have the luxury of simply calling up Mark Zuckerberg. With Meta gutting its news team in Australia, we have no clear pathways or avenues to even begin discussions.”

And which publishers should be included? The ACMA’s list of eligible news businesses - which would have become relevant if Meta was designated - shows some pretty weird mastheads on there (News Cop, anyone?).

It’s a byzantine process to be added to the list. Unmade applied months ago, and we still haven’t had an answer (but if you’ve been wondering why we’ve created a “Policy and regulation” tab on our home page, it’s to try to meet the “core news” requirements).

We’ll see what happens if the next government, of whatever political flavour, continues the process, but the early signs are that this may - eventually - be good for the big news companies, but of little help to the independents.

InterCombo

Omnicom’s proposed takeover of IPG will remake the holding company landscape if it happens.

Last March, we crunched the 2023 full year numbers for the seven big holding companies (and Enero). We converted everyone’s revenues in to Australian dollars for the comparison, and as best we could, as they use different methodologies, we attempted to compare their profit numbers.

WPP had the most revenue (with Omnicom narrowly second and IPG a distant fourth).

In profit terms, Publicis was ahead, with Omnicom and IPG third and fourth.

And in market capitalisations, Publicis was the most valuable business.

While both companies’ boards have agreed a deal, the process will drag on for several months, at least into the second half of next year. And that’s if somebody else (Accenture?) doesn’t try to gatecrash the party.

For all the fun with portmanteau names - InterCom? OmnIPG? - it’s a takeover. It’ll be goodbye IPG and an even bigger Omnicom.

The Murdoch succession

There’s little point speculating too wildly on the consequences of Rupert Murdoch’s legal loss in his attempt to guarantee son Lachlan’s succession after his death.

The only certainty is that things have become more uncertain.

Even those involved will not yet know what this means for the future of News Corp and Fox Corp.

The family trust that controls the two businesses currently features eight votes - four for Rupert and one each for the oldest siblings of Lachlan, James, Elisabeth and Prudence.

If Rupert and Lachlan Murdoch had succeeded in changing the structure, Lachlan would have been guaranteed control, which would have seen the organisation. broadly continue with its right-leaning positioning. The other three siblings don’t necessarily share those politics.

Assuming the ruling stands (and there are appeal options), there are a spectrum of possibilities after Rupert Murdoch’s death.

The least revolutionary outcome would be Lachlan staying where he is, but taking direction from the siblings on softening the editorial direction of the empire.

The most radical would be some kind of breakup and division of the spoils. Complicated as that sounds, it would be even more complicated than that. The family does not own the majority of the business, only the preferential shares which give day-to-day control. But in significant structural changes, ordinary shareholders have a greater say. That’s one reason last year’s attempts to reunite News Corp and Fox Corp as one business failed.

Rupert Murdoch is (a healthy-looking) 93-and-a-half. Actuarial tables suggest that a man of his age typically has just under three years to live (His mother Elisabeth died at 103, his father Keith at 67).

When the moment comes at some point over the next decade, there will be turbulent times for News Corp.

The twists of speech radio

The last set of radio ratings of the year dropped on Thursday, and last night saw one final (?) surprise exit, with 2GB’s drive host Chris O’Keefe telling listeners it was his last shift.

O’Keefe’s 7.4% share was an improvement, but still a long way off the ratings Ben Fordham was delivering before he moved to breakfast.

Sydney’s talk radio market will see big changes next year.

For 2GB, Ray Hadley (who bowed out on top with a 13.7% share) will be replaced in the morning slot by the capable Mark Levy (who demonstrated his chops on the day of the Bondi Junction attack).

ABC Sydney will see Richard Glover bequeath a 6.7% share to his successor Chris Bath. ABC Sydney Mornings presenter Sarah Macdonald lost 1.3 ratings points to depart on a 6.2% share, with the network’s inability to name her successor looking increasingly embarrassing.

And there was no farewell ratings bump for Patricia Karvelas as she departed ABC Radio National’s breakfast slot. The network’s average 5.30-9am metro audience remained stuck on just over 50,000.

For ARN Media, looking for a glimmer of a positive headline about The Kyle & Jackie O Show, the ratings brought a growth in average audience for the first time since networking into Melbourne.

The Kyle & Jackie O Show’s average audience rose from 139,000 across the two cities to 144,000.

Unmade Index lifts

A 3pm jump in Seven West Media’s share price saw the company move back past ARN Media for market capitalisation yesterday, after being overtaken earlier this month. SWM shares rose by 7.1% for the day, giving it a market capitalisation of $239m, ahead of ARN Media’s $229m.

In a mostly positive day of trading, Ooh Media grew by 0.4%. That followed a fall of 3.8% on Thursday, reacting to Ooh Media warning the market that ad bookings have slowed and that it plans to save $15m through a restructure. On Monday Ooh announced the exit of sales boss Paul Sigaluff.

Vinyl Group rose by 1.8%. That followed a jump of 4.8% on Thursday after the company announced it had agreed to add Concrete Playground to its publishing portfolio with completion due at the end of February.

And Southern Cross Austereo rose by 0.9% yesterday after revealing that it has agreed a new three-year, $160m debt facility with a syndicate of CommBank, NAB and ANZ.

The Unmade Index closed up by 1.05% at 438.3 points.

CotW: Sunscreen for men

In each edition of BotW, our friends at Little Black Book Online highlight their Campaign of the Week

LBB’s APAC reporter Casey Martin writes:

Agency Sick Dog Wolf Man has launched its own direct-to-consumer sunscreen brand, Slather. SDWM is using animated tradies, sporting mullets and drinking Monster, and a positioning - ‘The Sun is Not Your Friend’ - that spotlights the sun as a villain.

In a TikTok launch film, a humanised sun disturbingly licks a tradie until he’s totally sunburnt. The animation is slightly crude, as is the language. It ends with a jingle made by Production Alley. The packaging is bold in its use of font and colour.

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