A mining magnate investing in a television station ought not be that surprising; just look at the history.
EYEBROWS were raised last week when Australia’s richest woman, Gina Rinehart, emerged on the register of Ten Network Holdings with a 10 per cent stake worth $165 million.
What on earth was this reclusive mining magnate from the west doing?
Yet the past shows that Western Australia’s entrepreneurs, including her father Lang Hancock, have consistently invested in the media, especially the national broadcasters of free-to-air television.
Alan Bond’s ownership of Channel Nine is the most colourful of those. Having bought the station network from Kerry Packer for $1 billion, he famously had to sell it back for $700 million a few years later.
“You only get one Alan Bond in your lifetime,” Mr Packer said.
It is easy to presume, from the nature of those listed in the accompanying table, that such media ownership was not just purely for investment purposes.
Wielding influence is clearly a driving force for many, as is the accompanying limelight that comes with playing in this high-profile yet heavily regulated sector.
While early business investors in WA media can be traced back more than a century, when The West Australian newspaper was owned by Charles Harper and Winthrop Hackett, the first of the modern era could well be considered mining partners Lang Hancock and Peter Wright, who launched a Sunday paper known as the Independent on April 27 1969.
The motivation of the pair is provided in an editorial in that paper, launched in the early part of WA’s first iron ore boom and in the middle of the Cold War – both were frustrated by government and bureaucracy in holding up development, fearful of the threat of socialism and disappointed by existing media.
“As I see it we are starting this paper simply to have a voice in public affairs,” Mr Wright wrote.
“We don’t want to control anybody or anything but we do want to be heard and want to provide a channel through which the views of other people can be heard.”
Mr Hancock wrote that the Independent was not a propaganda sheet for the pair. That aim was better served by the use of public relations rather than media ownership, he said.
“Our primary aim is to help as far as we can with the development and security of Australia along the lines that our experience has led us to conclude will be most effective,” Mr Hancock wrote.
Competitiveness
One of Mr Hancock’s great complaints was Australia’s lack of competitiveness, with miners bound up with ‘socialist’ rules governing resources ownership, labour, capital and export.
It is in this area we can see echoes of his thinking in his daughter, Mrs Rinehart, who bitterly remembers that the Brazilian iron ore industry was developed as a competitor to WA by the Japanese, who were fearful of being held to ransom by Australian policy.
Mrs Rinehart believes the same thing is happening today with the development of African ore deposits, and thinks Australia risks getting lazy on the back of Asian growth. She outlined her concerns recently during a speech to the Telstra Business Woman of the Year awards.
“Of course China’s needs are growing, few would argue otherwise,” she said.
“But importantly, unless Australia stays competitive in our export industry, we won’t be growing with China as China will increasingly be investing and buying elsewhere. It is critical that we understand this and adapt.
“Australia is a high-cost country, with high wages and high taxes, plus increasing government-related expense and risks for approvals, permissions and licences.
“We are approaching a crossroad.
“WA’s high costs have been protected for decades by a freight advantage – but this advantage is jeopardised. Very large ore carriers enabling lower freight costs are being built overseas and Asian ports are being expanded to carry high-grade ore from Brazil and, in the near future, West Africa. West Africa is a new frontier with a mineralised zone stretching thousands of kilometres from Mauritania to Congo, with people desperate to work for less than $2 per day.
“Australian companies are flocking to invest there. Former foreign minister Stephen Smith reported 300 Australian companies were now investing in West Africa. This alone should be a wake-up call; a call for action to make investment in our country more attractive.”
Political awareness
So is African investment enough to spark a purchase in the Ten Network?
That is doubtful. Mrs Rinehart has long been linked to conservative think tanks, but always behind the scenes.
While she did quietly launch a new a lobby group called Australians for Northern Development & Economic Vision – pushing for a special zone to encourage business in the nation’s north – it took the federal Labor government’s proposed Resource Super Profits Tax to really bring Mrs Rinehart out of her shell.
A well-coordinated public rally brought mining magnates including Mrs Rinehart out from behind the corporate veil and up on to the back of a ute with a megaphone demanding the government “axe the tax”.
It might have riled the government and its supporters to have a billionaire in pearls resisting a tax grab but the miners changed the mood of the country and, unexpectedly quickly, cost Mr Rudd the prime ministership.
It would not be surprising to find that Mrs Rinehart found some solace in this process. Business was heard and public anger was vented.
Just how an investment in Ten Network will realise that is hard to say. It is doubtful that being a director of a listed broadcaster will be anything like the hands-on days of outright ownership of a local newspaper like her father had.
Radio broadcaster Howard Sattler recalls the days when Mr Hancock owned the paper and he was a young reporter learning the ropes.
Mr Sattler remembers taking a long light plane trip to the Pilbara with the mining magnate, who also had a pilot’s licence.
At the time, Mr Hancock was fighting with state and federal governments to prove he had the ore and that the country would benefit if he developed it.
At the site of what is now Rio Tinto’s Marandoo mine, the mining entrepreneur had the young reporter hold a magnet near his knees.
“All this stuff flew up and attached itself,” Mr Sattler recalls.
“’Do you think there is any iron ore there, Howard’,” the radio host recalls being asked.
The pair also flew to the Pilbara coast where Mr Hancock’s plan was to create a port by using a subsea nuclear explosion.
“He was trying to convince me,” Mr Sattler said. “He was trying to indoctrinate me into the cause.”
Hancock’s media exit
But it’s understood Mr Hancock was frustrated by his foray into the mainstream media. The financial cost of the venture was exacerbated by a failed attempt to create a daily newspaper, after which the mining magnate sold out of the venture.
The Wright family stuck with the newspaper and, as a result, became seed capitalists in Perth’s first FM radio station. Despite the success of that, they also withdrew from media investment when Peter Wright died. There is some irony in that decision to quit media because the developer of the radio station 96FM, Brian Treasure, went on to play a key role in the start up of Channel 10.
The Wright family and the Hancock clan don’t have much time for each other these days. There remain open wounds from a recent court battle.
Mr Wright’s son Michael believes Mr Hancock sold out of the Independent because it simply failed to do what he had invested in it for – influence political outcomes.
It is known that Mrs Rinehart views her father’s other media development, the National Miner, as a more successful publication. The first edition of that paper in June 1974 pitched the concept of a rail line across the north linking WA’s ore with Queensland’s coal. That idea is still talked about, on occasion.
While it is hard to compare the two newspapers, the mining publication employed a young Ross Louthean, who went on to become a major resources publishing player.
Privacy
Some who speculate on Mrs Rinehart’s investment in Ten Network wonder why someone so private would want the spotlight that will come with this – especially now she sits on the listed company’s board.
One experienced campaigner from the advertising world can see the logic.
“It puts her into a powerful league of people she has not had to date because she has been intensely private,” WA Business News was told.
It’s a league she may be more comfortable in these days, rather than as a 25 year old when she organised a 747 flight over Australia’s resources developments for her father’s 70th birthday in 1979.
Despite having several federal ministers and physicist Edward Teller, the father of the hydrogen bomb, along for the ride, it is clear that Mrs Rinehart’s venture got little support from the media, either before the event or after.
The Age newspaper panned the idea in a front-page story headlined ‘Hancock’s flight of fancy’.
“What sort of 70th birthday present do you give a daddy who has everything,” The Age wrote derisively.
“In the case of Gina Hayward (she has since remarried) you give him a birthday present on a Qantas Boeing 747 and invite such celebrated merrymakers as the father of the H-bomb and Joh Bjelke-Petersen.
“Throw in Sir John Gorton, some mining big shots and assorted Arab, Japanese and American megahucksters and you have one hell of a flying fiesta on your hands.
“And if you soften them up with some local brew and few gags from Joh you might just get them in the mood to buy up all of Australia’s mineral resources and it’s a birthday daddy will never forget.”
It may well have been that kind of contemptible treatment in 1979 that caused Mrs Rinehart to duck for cover from the media spotlight as a 20-something.
Perhaps 30 years later, the Labor government’s mishandling of the mining tax has made the media the lesser of two evils? Especially, if you can be inside the tent.
