Source : Globe & Mail

New laws seen ratified by next summer as government likely to control Senate

MELBOURNE -- The Australian government signalled yesterday its intention to push ahead with changes to controversial media ownership rules and said it was keen to see another big player emerge.

Speculation the government would allow more foreign ownership and cross-media ties boosted media shares as high as 12.2 per cent last week.

Previous attempts to change media laws have been thwarted by the upper house Senate, but the coalition government re-elected Oct. 9 is expected to gain control of that chamber.

"I think more foreign ownership is something we can anticipate," Communications Minister Helen Coonan told ABC television.

"I think it would be good to see a third force emerge -- but obviously we do want to make sure there is diversity."

The Australian Senate has previously tried to block Rupert Murdoch's News Corp. Ltd. and Kerry Packer's Publishing and Broadcasting Ltd. (PBL) from owning television stations and newspapers in the same state capital.

Under current rules, a TV station operator cannot own more than 15 per cent of a newspaper in its broadcast licence area and vice versa. Foreign companies cannot own more than 15 per cent of a TV station or 25 per cent of a major newspaper.

With the senators not due to take up their positions until July next year, Ms. Coonan said any changes would not be imminent.

"Assuming that you would get the Senate, in the sense that you would have a more accommodating Senate, it probably realistically wouldn't happen until the first of July."

Analysts have speculated News Corp. may eventually embark on a buying spree to try to snare an Australian TV station to add to its newspaper stable, with second-ranked Seven Network Ltd. or third-ranked Ten Network Holdings Ltd. the most obvious targets.

Mr. Packer's PBL has long been tipped to try to add newspapers to its TV and casino assets with publisher John Fairfax Holdings Ltd. seen as a likely target.

Analysts have also long speculated newspaper group APN, controlled by Tony O'Reilly's Independent News & Media, along with publisher Rural Press, and radio operators Austereo Group and RG Capital, could be among the first players to be gobbled up in an initial consolidation phase.

Shares in Austereo, which won a broker upgrade after the election on expectations it would be a takeover target, climbed 12.2 per cent last week. Seven and Ten shares both rose more than 9 per cent, with Fairfax and PBL shares up more than 4 per cent.

Ten's fortunes were also boosted by an 88-per-cent jump in annual profit, reported last Wednesday.

Winning control of the Senate -- the first time for a government in 23 years -- could also herald big changes in telecommunications with the government set to sell its $30-billion Australian ($21-billion U.S.) stake in Telstra Corp. Ltd. Ms. Coonan said it was too early to talk about the structure of the sale but she said it would likely be conducted in stages.

"Obviously it's a very big float and logically you would think that selling it in tranches may be the best way to go," Ms. Coonan said.

On Saturday, Ms. Coonan said the government would not likely sell its 51-per-cent stake in the telecoms behemoth next year or have an offering much before the first quarter of 2006.

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