May 17, 2015 / 10:04 PM / in 3 years

RPT-Rival of Australia's Abbott pushes media reform to boost political profile

(This is a repeat of an item issued on Sunday)

By Byron Kaye

SYDNEY, May 17 (Reuters) - Efforts in Australia to drive forward new laws scrapping media ownership limits have more to do with a rival trying to paint Prime Minister Tony Abbott in a bad light than a genuine push for change.

Analysts and industry executives say the law has no hope of being approved because Abbott, following a tumultuous 19 months in office, will be reluctant to adopt a measure that could upset media magnate Rupert Murdoch, who has been a big critic.

Instead, they say, Communications Minister Malcolm Turnbull, widely seen as Abbott's most likely challenger, is backing the reform plan to push the prime minister into a position where he has to yield to the media industry's most powerful individual.

Such an outcome would let Turnbull portray himself as a driver of change. Although the tactic would not force Abbott from office, it does show how vulnerable he remains, even after surviving a leadership challenge in February.

"Turnbull is trying to push things along and he can then say, 'Nothing's happened'," said Ben Goldsmith, a media researcher at Queensland University of Technology.

"For major changes (to media policy) it does require there to be general agreement, or public demand."

Since the 1980s, Australian law has denied free-to-air broadcasters more than 75 percent of the audience in any area, and no company can own print, free-to-air and radio in a city.

But as online disruptors, such as Netflix Inc, grab audiences and advertising revenue from old media firms, the A$40-billion industry says scrapping the 30-year-old laws is key to its survival.

However, Murdoch, normally a free-market proponent, vowed in March to oppose any overhaul that denies him the chance to air exclusive sports games on his struggling pay-TV channel, Foxtel.

With certain marquee games deemed essential to sports-mad Australia reserved for free-to-air, Foxtel shows only matches rejected by traditional networks, or in tandem with them. It wants permission to buy up games for itself.

That means Abbott must either take on the owner of two-thirds of Australia's newspapers or soft-pedal a deregulation measure backed by almost every media company, and the two major political parties themselves, in the last two years.

"Murdoch will use his media vehicles to achieve his policy outcomes," said Peter Chen, a senior lecturer at the University of Sydney School of Political Sciences.

"Politicians across both of the spectra have tended to defer to his interests when thinking about media policy."

A spokesman for Turnbull, who was named as the most likely contender in Abbott's leadership challenge this year, confirmed he had asked the prime minister to consider the reform, but made no further comment.

Abbott's approval rating plummeted after a harsh budget in 2014, but his biggest misfire came in January, when he gave Australia's first knighthood to England's Prince Philip.

That upset republicans who want to cut ties with Britain, and led voters to wonder if Abbott had lost touch with national sentiment.

A February opinion poll showed 39 percent of respondents preferred Turnbull as party leader, up from November's 35 percent, while just 19 percent preferred Abbott, down from 20 percent.

Abbott's office did not respond to a request for comment, nor did a spokesman for Foxtel, which is co-owned by Murdoch's flagship News Corp and telecoms giant Telstra Corp .

Describing Murdoch's demand for football rights in a recent interview, Turnbull told Australian Broadcasting Corp, "To turn around and say to people, 'You're going to have to start paying to watch games of football that you were previously able to watch for free on TV,' is unlikely to be popular."

In March, Murdoch used Twitter to accuse Turnbull of helping his "buddies" at top-rating free-to-air Nine Entertainment Co , saying he would oppose any package that did not benefit Foxtel.

Nine is ready to pounce, with funds available from a recent asset sale to buy broadcaster Southern Cross Media Group if the audience cap is removed, its Chief Financial Officer Simon Kelly told Reuters.

Asked if he believed Turnbull was undermining Abbott by forcing him to back away from a fight with Murdoch, Kelly said, "That is my understanding of the situation, yes".

Ultimately, Abbott was likely to shelve Turnbull's reform plan, said Morningstar media analyst Brian Han.

"Where's the pressure point?" asked Han. "Just leave it as it is and everyone's 80 percent happy." (Editing by Clarence Fernandez)

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