A couple of stories you will have great difficulty finding anywhere in a News Corp paper around the world, let alone in Australia. They both deserve the widest possible publicity.
As outlined above, according to the Fairfax-owned Canberra Times, News Corp has had to pay the ACT government $77.6 million to settle a tax-dodging case.
“The Rupert Murdoch media empire paid the money late last year in a secret settlement, two years after being taken to court by ACT tax authorities who demanded $84 million in unpaid taxes, penalties and interest.
“…The trail reaches back to 2004, when the territory claimed it was owed duty on the transfer of nearly $9 billion worth of shares in a former territory-registered Murdoch company, Karlholt, as part of the restructure of the media mogul’s empire.”
Ahh, 2004, when Murdoch spirited the company’s domicile from Australia to Delaware in the US where the regulation is hydrogen lite and the concern for corporate governance is even less imposing.
Just imagine if it had been Fairfax Media or Kerry Stokes, or James Packer pulling a similar swiftie. The Murdoch papers would have been all over the story, barking and baying for blood (especially if there was a Labor government or fellow traveller involved). But not a peep from the the watchdogs of public morality at Holt Street in Sydney about their company’s tax tap dance and how it came unstuck in Canberra. Even more reason for News Ltd to view Canberra with disdain?
Another story you won’t see covered in any detail in the News Ltd papers is about the real financial position of the Shine TV production company that News Corp is negotiating to buy.
According to a document doing the rounds of the Sydney investment managers, the Shine production company, 53% owned by Elizabeth Murdoch, has net current assets of just £1.3 million and 95% of its fixed assets of £220 million is goodwill. It had revenues of £257 million and a gross profit margin that rose to 28%. Earnings before interest, tax, depreciation and amortisation rose 3.4%, to £28.4 million. According to media reports, Murdoch senior proposes that his family company (aka News Corp), pay a reported £450 million or about $720 million. That’s about 26 times Shine’s EBITDA, which is very, very high.
The Australian Financial Review’s Chanticleer columnist revealed the details today. Tony Boyd (aka Chanticleer) said an analysis of the Shine accounts has been prepared by Alex Pollak, media analyst at Macquarie (and married to Sydney Morning Herald business columnist Elizabeth Knight). That will whip up more anti-Fairfax fervor at News Ltd, especially at The Australian, where most of the senior staff regard themselves as The Australian Financial Review in exile.
Chanticleer says the details in the accounts have not gone down well with Australian fund managers, and suggests the purchase needs independent scrutiny of the valuation. That’s a fine, noble sentiment, but unfortunately not one held over at News Ltd.
Valuations, cost benefit analyses and independent expert reports are for other companies and governments, not for News Corp, especially where the family is involved. The family? Yes, the Murdochs. All the Shine buy will be is a simple transfer of shareholder wealth from the non-Murdoch shareholders (who own the majority of News Corp), to the Murdoch family in Elizabeth Murdoch. How do you value the phrase, “Thanks dad”.
But do remember the Shine deal when next you read or hear someone at News Ltd calling for a cost benefit analysis of the NBN or any other proposal.
With the Shine deal in the offing, it’s no wonder the News Ltd papers gave a lot of publicity to the announcement yesterday from Ten Network that it had renewed the MasterChef franchise with Shine Australia. MasterChef had been produced in Australia under sub-licence by Fremantle International for Ten. Now its Shine’s and this is the big program for both. Got to keep the publicity flowing for what will be a rotten deal for non-Murdoch shareholders of News Corp.
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