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Only one in a lifetime

10 Jan 2006
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IT IS ALMOST 25 years since Kerry Packer came to speak to a media politics class that I taught with Professor Henry Mayer. Finding myself alone with him, I tried to make light conversation by saying that I had read in the paper that he had just bought a chess computer.

Instead of a pleasant conversation about chess and computers, my remark provoked an outburst of anger that such an item had been published. He said he could not see why such a trivial fact should be in the paper, and was outraged by this invasion of his privacy.

Meanwhile, his own media outlets routinely invaded the privacy and minutiae of others’ lives - most of them people who neither exercised the power in society he did nor enjoyed his social advantages.

My other main impression on that day - when he gave a very intelligent and pertinent talk to the students - was his strong and pervasive sense of resentment. I’d had a similar impression watching Rupert Murdoch a year or two earlier when the Australian Broadcasting Tribunal, in a momentary outbreak of intransigence, had tried to stop him completing the Sydney-Melbourne axis for the Ten network. It is an interesting psychological puzzle how both these men, the beneficiaries of substantial inheritances, among the richest individuals in the country, leading lives of extraordinary privilege and power, had such considerable chips on their shoulders.

At the time we met, Packer was among the ranks of the super rich, having inherited the Melbourne and Sydney stations in the Nine network, plus a stable of Australia's best-selling magazines and assorted other assets when his father, Frank, had died about eight years earlier.

About five years later he would graduate from super rich to mega-rich, due less to his own business acumen than the absurd generosity of Alan Bond and the frenzied environment created by the Hawke government’s changes to television policy. Television probably produced the longest and most bitter cabinet conflict in the first years of the Hawke government. Behind the deadlock was the wish of some ministers, specially the prime minister, to do nothing that alienated Packer or Murdoch.

The deadlock was broken by Paul Keating. He successfully advocated abandoning the old two-station rule to allow ownership of stations reaching a majority of the population while at the same time introducing a new principle banning cross-media ownership, such that in any new purchases a media proprietor could not own a newspaper and a TV channel in the same market. In Keating’s characteristically memorable phrase, proprietors could choose to be a queen of the screen or a prince of print, but not both.

The move advantaged Murdoch (who had, anyway, to dispose of his Australian TV channels because he had acquired American citizenship) and Packer (who did not own any newspapers), and it disadvantaged the Fairfax group and the Herald and Weekly Times, whose patterns of cross-holdings made expansion in either medium very difficult.

The changes to the media laws produced a frenzy because many saw it as the final chance to buy into television. The result was that hugely inflated prices were paid for control of the three commercial TV networks. Murdoch sold his two channel Tens to Frank Lowy and used the money to buy the Herald and Weekly Times newspapers. Packer accepted an offer by Alan Bond of just over a billion dollars to be paid in stages.

Because of their huge debts, all three of the new owners sold out within a few years, and for the first time since the late 1950s many Australian TV channels made a loss. Channels Seven and Ten were for some time in receivership. When Bond could not meet the final payment, Packer regained control of the network at a bargain price, meaning in effect he had been paid several hundred million dollars to have a holiday from TV for a few years. With the other channels in such straitened circumstances, Packer now stood above Australian commercial television like a colossus.

The pragmatists in the Labor government had urged that it was vital to their electoral success to keep Packer onside, but when Packer sniffed a change in the political wind in the mid-90s, he was quick to publicly embrace John Howard as a good prospective prime minister. Keating was furious, and a public feud began that lasted until Packer’s death. Behind the feud is Keating’s realisation that Packer had played him for a sucker. The policy changes of 1986-87 had made Packer a fortune and he emerged the dominant player in the Australian television industry. But Packer’s appetites were only ever briefly assuaged. He soon had designs on the Fairfax newspapers, financially weakened by the folly of Warwick Fairfax’s privatisation of the company, and began campaigning against the cross-media ownership laws - conveniently forgetting they were part of the package that enabled him to expand his TV empire.

Kerry Packer did not always achieve what he wanted in his attempts to influence media policy, but he had enormous power to stop or delay or modify what he didn’t want, particularly to protect the privileged position of Channel Nine.

Pay television developed much later and more slowly in Australia than in most comparable countries, and this was at least partly due to Packer’s efforts. The potential growth of new free-to-air services provided by the introduction of digitalisation has not yet been realised in government policy.

But the value of Nine has already peaked. It will become increasingly more difficult for it to maintain its share of a diversified, multi-channel television market. Whatever his personal abilities, James Packer is assuming control at a moment when his father’s formulas for maintaining profitability cannot be indefinitely sustained. Given the deep pockets of the central players in Australian media, the era of cosy oligopoly in Australian media might not die with Kerry Packer, but its shape will certainly change.

Rodney Tiffen is professor in government and international relations at the University of Sydney. Versions of this article appeared in the Age and the Sydney Morning Herald.
 

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2006
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