Speculation is building that media heir Lachlan Murdoch could be about to buy half of James Packer’s new stake in Ten Network, and then join Packer in a push to restructure the company.
Packer spent about $280 million building an 18% stake in Ten last week. He has met with Ten management since making his investment and is reported to have asked for board seats, from which he can presumably start driving change at Ten.
However, Packer is believed to have met with Murdoch and discussed the option of Murdoch investing alongside his long-time friend.
Reports suggest the investment is no certainty, and would be at least a month away if it does happen. But it appears to be under consideration.
Murdoch has become increasingly involved in the Australian media sector in the last 18 months, buying a 50% stake in FM radio network DMG Radio Australia and also investing in Prime Media, which operates a regional television network.
Murdoch recently became deputy chairman of Prime, suggesting he will take a more active role in turning around that business, which has struggled in the last few years.
However, if Murdoch does get involved in Ten, his investment and board role at Prime could raise further competition or conflict of interest concerns.
The Australian Competition and Consumer Commission has already said it will examine Packer’s investment in Ten on the grounds that he is also a substantial shareholder in Foxtel via his holding in Consolidated Media.
Exactly why Packer wants to share his investment with Murdoch isn’t clear.
However, Packer and Murdoch have done business together in the past, most notably as co-investors and directors of failed telco OneTel.
The pair also considered a bid to privatise Consolidated Media Holdings back in 2008, although the credit crisis put paid to that plan.
Packer’s plans for Ten remain the subject of much speculation. Some pundits suggest Packer wants to remove chief executive Nick Falloon, cut costs across the board or drop Ten’s expensive One sports channel.
Whether selling half of his stake in Ten to Murdoch would increase Packer’s power or dilute it remains to be seen.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
