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High Noon for News Corp as CBS rides into town

Analysis

Look who just rode in to take Network Ten from under the expectant noses of Lachlan Murdoch and Bruce Gordon.

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It’s Sumner Redstone, the controlling shareholder of the now global media-content maker and distributor Viacom and CBS Corporation.

Mr Redstone, 94, and in poor health, is one of the world’s richest men who, post World War I, built his father’s amusements business into one of US media’s biggest players.

His sidekick is Leslie Moonves, chairman and CEO of CBS Corp. Also with a dynastic proprietorial interest is Mr Redstone’s daughter Shari E Redstone.

Ten’s administrators Korda Mentha shocked the local media market on Monday with the announcement that CBS, already a major content supplier and Ten creditor, is to be the new owner of the struggling Australian network.

Since 2006 there has been no impediment to foreign ownership of TV licences in Australia although CBS will now have to jump through a Foreign Investment Review Board approval hoop.

All creditors, including Lachlan Murdoch, Bruce Gordon, James Packer and Gina Rinehart will get their money back.

Bargain buying for CBS, shareholders burnt

Total cash outlay to CBS is reportedly $123 million − a bargain.

Shareholders will take a haircut with the Ten holding company to be de-listed.

News Corp’s game plan to merge with Ten after the Turnbull government’s media reforms got through the Senate is now in disarray.

The biggest impact from CBS’ takeover of Ten is not only the local network’s survival as a going concern but confirmation that the 24 million pairs of Australian eyeballs must now be seen as an Asian branch of Viacom’s global content and distribution conglomerate.

Rupert Murdoch’s News Corp, its Fox Sports subsidiary and pay TV monopoly Foxtel, now have a major and aggressive competitor on their Australian doorstep.

Viacom’s investments cover everything in media from video games, Hollywood blockbusters, popular sports, subscription and free-to-air television and radio. Then there’s publishing with Simon and Schuster books and magazines, along with subscription video streaming through CBS All Access.

Netflix and Stan, which have established good cash flow businesses in Australia through WiFi streaming to smart TVs and devices, will not be happy about having another video streamer muscling in with lots of compelling popular content.

New political landscape for government’s media reforms?

But what happens with Communications Minister Senator Mitch Fifeld’s media reforms now?

Opposition Leader Bill Shorten has twisted the Korda Mentha knife now sticking out of News Corp with his statement on Monday that CBS was welcome in Australia and that the abolition of Paul Keating’s local media ownership constraints was no longer necessary.

The Fifield reforms are still before the Senate pending negotiations with Senator Nick Xenophon’s NXT party.

The minister has already done a vote deal with Pauline Hanson’s One Nation senators for reprisal measures against the ABC and SBS. Industry observers told The New Daily that Viacom/CBS would still like to see the media reforms get through so that it could pursue the expansion of its Australian operations across capital city platforms and distribution systems.

CBS/Ten could also become a new player against the Seven and Nine networks for rugby league, AFL, cricket and other popular sports when free to-air broadcast rights come up for re-negotiation.

CBS in America has been the home of famous network journalist anchors Ed Murrow, Walter Cronkite and Dan Rather and created the current affairs program Sixty Minutes, which was copied by Channel Nine here.

Viacom International Media Networks now has a global reach guesstimated at 3.2 billion households in 170 regions and 40 languages through direct multichannel broadcast and content distribution deals for its most popular entertainment brands which include MTV, Nickelodeon, Comedy Central, Paramount, and the UK’s Channel 5.

Mr Moonves, who announced the Ten takeover in New York after he had sent CBS senior executives to Sydney for due diligence, is known as a hands-on content maker with decades of picking audience winners for Warner and now CBS.

Free-to-air TV networks in Australia, all struggling to compete against the video streamers, have been granted a licence fee holiday by the Federal Government to remain viable.

Although local TV networks all carry the most popular US shows, all licensees here are bound by law to a quota of original Australian content which has built and sustained a local commercial TV production industry since 1956.

CBS, Ten’s new owners, will continue to be bound by that quota.

Quentin Dempster is a Walkley Award-winning journalist, author and broadcaster with decades of experience. He is a veteran of the ABC newsroom and has worked with a number of print titles including the Sydney Morning Herald. He was awarded an Order of Australia in 1992 for services to journalism.

This article was first published by The New Daily.

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