The Australian vs Macquarie, News Corp governance concessions
July 28, 2008
Here are Stephen Mayne's two stories from the Crikey edition on Monday, 17 October, 2005.
4. The Australian v The Millionaire Factory
By Stephen Mayne
Has anyone noticed The Australian's aggressive campaign against private public partnerships and tollroads deals in particular? Here's a sample of what has been produced over the past week:
Row over Carr's plum bank job - October 11
Editorial: highway robbery - October 14
Pay per trip and then a whole lot more - October 15
Toll barons drive bargain - October 15
Ports, railway under cut by tollways - October 15
PM's man wants rules on toll deals - October 17
Does anyone else think this might just be the latest round in the paper's campaign against Macquarie Bank for daring to sue the Murdoch empire over a Michael West feature on Tasmanian mining company, Allstate Exploration?
"Michael West and The Australian Business Team" must certainly be feeling vindicated to have been short-listed for the business Walkley Award.
Poor old Bob Carr might find himself as collatoral damage if this legal dispute continues to escalate. The Australian is obviously looking at ways to maximise the damage to The Millionaire Factory after they refused to settle, although they need to be careful not to aggravate the damages in any adverse judgment.
The first strategy was a flurry of stories on the remarkable Allstate saga in which Macquarie bought about $50 million worth of inter-company loans for $300,000 and now look like getting satisfaction in full after a turnaround at the Beaconsfield Gold mine.
The next move has been to put the spotlight on private public partnership and particularly tollroad deals as these have been Macquarie's biggest earners in recent years.
For instance, if the Murdoch-owned Courier Mail was to suddenly campaign ferociously against the plan of Brisbane Lord Mayor Campbell Newman to use private equity to deliver all his ambitious infrastructure projects, it would be pretty difficult to proceed.
With the Macquarie juggernaut now sitting on more than $100 billion worth of assets around the globe, it will be interesting to see if they blink, particularly given their media aspirations and the prospect that commercial deals with News Corp could be on the agenda.
7. Is Rupert offering governance concessions at News's AGM?
By Stephen Mayne, News Corp shareholder
Is Rupert Murdoch planning to unveil some governance changes at the AGM in New York on Friday? What appears to be a well-sourced leak to The Observer in London suggests a concession of sorts is on the cards, although there's no mention of abandoning the notorious poison pill. The paper summarised the changes as follows:
News Corp's proposals, which have been leaked by senior insiders, would force Murdoch to seek re-election to the board each year and ensure that the majority of directors were independent non-executives with no ties to the Murdoch family.
The company has appointed veteran corporate governance lawyer Ira Milstein, an associate dean of Yale School of Management, to oversee an overhaul of the way News Corp is run. It is understood that Milstein's mandate is to bring News Corp's corporate governance procedures into line with best US practice
The resignation of long-time News Corp investment banker Stan Shuman as a director last week was a gesture to the "majority of independents" mantra, but News will also need to oust the likes of Ken Cowley and Chase Carey and find four genuine cleanskins – which will be no easy feat.
When James Murdoch was appointed CEO of BSkyB, he disappointed his father by resigning from the News Corp board in recognition of good governance principles. Given that Chase Carey is CEO of Hughes Electronics, the US satellite TV giant which has huge related party dealings with News Corp, its 34% parent, surely he should follow the lead of James Murdoch and resign? Expect a big protest against Carey and the other three directors facing re-election at Friday's AGM.
Even if all this happened, they would still only be minimalist changes. News Corp needs to appoint an independent chairman, remove its two-tier voting structure and abandon the poison pill. However, that would leave John Malone as the largest voting shareholder.
Rupert has certainly selected a venue steeped in entertainment history for his first New York AGM. Check out a description of the Millennium Hotel's Hudson Theatre here. News Corp's connection with both American Idol and The Titanic make it a good choice for his debut in The Big Apple, as the following explains:
The Hudson Theatre was built by Henry B Harris, an up and coming producer who later perished aboard the ill-fated RMS Titanic. The theatre was then managed by Harris' wife, Irene Harris, the last known Titanic survivor to be rescued in a lifeboat, who went on to become the first woman ever to produce theatre in New York City. With over 90 plays performed on the Hudson Theatre stage in 20 years, it was known as one of the finest playhouses in the city. One such play, Hot Chocolates in 1929 introduced the world to Louis Armstrong who went on to become a legend in his own right.
In the 1950's, the Hudson Theatre was home to NBC's The Tonight Show with Steve Allen as host. During this time legends such as Bob Hope, Elvis Presley, Ernie Kovacs, Milton Berle, Sammy Davis Jr., Barbara Streisand and Vincent Price graced the theatre's stage. The long-running daytime game show, The Price is Right also made its debut at the Hudson Theatre.
In recent years, the theatre has hosted a wide range of events and meetings including product launches by Microsoft; American Idol auditions; NBC's Last Comic Standing; and Bill Maher's Victory Begins at Home show, which was broadcasted on HBO.
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