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skase
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overview
This profile looks at the Australian Seven television
network. It includes a page on Alan Bond's competitor
Christopher Skase and the failed Qintex group.
This page covers -
the group
Seven, currently controlled by civil engineering equipment
czar Kerry Stokes, comprises six network owned-operated
stations (five in capital cities, one in Regional Australia)
and four independently-owned affiliates outside the major
metropolitan centres.
It also embraces magazine publishing operations - claimed
as embracing "one in four magazines read by Australians"
and "two of the three most widely-read magazines
in Australia" - which include operations that were
formerly part of Rupert Murdoch's
News group.
The group operates Telstra Dome stadium in Melbourne's
docklands and is a major shareholder in B Digital which
provides mobile telephone handsets and services to over
280,000 Australians (eg repackages airtime from Optus).
Ticketmaster7 is a joint venture with US entertainment
ticketing company Ticketmaster. AOL|7 is a partnership
with Time Warner's America Online
arm and telco AAPT.
the network's history
The network originated as an alliance of stations owned
and operated by Fairfax (in
Sydney) and the Herald & Weekly Times (in Melbourne).
The Melbourne station was sold to Fairfax following Murdoch's
takeover of H&WT; Fairfax in turn relinquished ownership
of the Sydney and Melbourne flagships through the disastrous
privatisation by Warwick Fairfax Jr.
The buyer was the Qintex group (discussed in more detail
on the following page), controlled
by colourful entrepreneur Christopher Skase, a former
Australian Financial Review journalist who had
leveraged ownership of a small mining company to acquire
specialist retail assets (eg the upmarket jeweller Hardy
Bros) and then move into property development, notably
the three Mirage resorts in Queensland and Hawaii.
Qintex already held a station in Brisbane; following acquisition
of the Sydney and Melbourne flagships it purchased stations
in other capital cities.
Qintex collapsed ingloriously after an unsuccessful takeover
of MGM/UA, the Hollywood studio
that has been recurrently bought and sold by Kirk Kerkorian.
life after Skase
Qintex's television interests were subsequently consolidated
within a separate company, which was listed on the stock
exchange but buffeted by competition and turmoil in the
broadcasting sector as players such as Packer and Telstra
jostled for position in free-to-air and subscription television.
Entrepreneur Stokes had acquired the Canberra Times
from Packer for $110 million
in 1989 during the churn of media assets in the period
following the News takeover of H&WT and deconstruction
of Fairfax, partly with a loan from News.
That loan was considered in an ABA report (PDF).
The paper was sold to Rural Press
in 1998 for $160 million and thus returned to Fairfax
family ownership.
In 1995 Stokes acquired a dominant stake in Seven (initially
around 20% but subsequently increased to over 40% through
purchases and share buy-backs).
In addition to property and earth-moving equipment dealerships
(eg the Caterpillar franchise in Western Australia) he
previously had television interests in the Golden West
regional network (Western Australia) - purchased and then
sold by Westfield Capital subsidiary Northern
Star during Frank Lowy's brief foray into broadcasting
- and 7's Canberra affiliate CTC-7.
Stokes has subsequently extended his interests (eg with
an equipment dealership in China and a stake in leasing
group National Hire).
In 1996 Seven joined with Kerkorian to takeover MGM/UA
from French bank Credit Lyonnais for US$1.3 billion. The
studio group had been sold to Giancarlo Parretti, who
proved unable to keep up with payments. Seven sold its
stake to Kerkorian in 1998 for US$389 million.
Seven developed an internet presence through its i7 online
content division in the late 1990s. That was expanded
in 2001 when it joined up with AAPT and AOL
to create AOL|7. Performance appears to be underwhelming
(eg garnering only 90,000 subscribers) and in 2004 the
partners sold AOL|7 to Primus Telecom for $23 million.
In July of that year Seven's Pacific Publications paid
$77 million for Murdoch Magazines, the Handbury family-controlled
publisher that had been spun off from News
Corporation. Pacific's titles as of July 2004 included
New Idea, That's Life, Marie Claire, Men's Health,
Better Homes & Gardens, Home Beautiful, Your Garden,
Family Circle, Girlfriend, K-Zone, Total Girl, TV Hits,
Golf, Leisure & Lifestyle and Monument.
Seven had bought a 50% stake in Pacific from PMP (another
News spin-off) in 2001, moving to full control in 2002.
Britain's ITV sold its 11.6% stake
in Seven for £87 million in 2006.
In November 2006 Seven announced that it would form a
joint venture with US private
equity firm KKR, which would acquire half of
its television and magazine interests (along with Seven's
50% stake in the Yahoo7 joint venture) for $735 million.
Seven had earlier paid $343m for 14.9% of WAN.
KKR was to pay $735 million for its 50% economic interest
in the joint venture, Seven Media Group, which will also
hold $2.5 billion of debt.
In July 2007 Justice Sackville of the Federal Court dismissed
all of Seven's claims in "mega litigation" over
closure of Seven's C7 pay television channel in 2002.
Seven accused 22 other parties (including News
Limited, PBL, Telstra and Foxtel)
of anti-competitive conduct in denying it vital broadcast
rights to the AFL and rubgy league. It sought damages
of around $1 billion. The action ran for 120 hearing days
and is reported to have incurred $200 million in legal
expenses. Sackville J said the amount spent on the case
bordered on the scandalous, questioning why Seven failed
to make its best offer for the rights when they became
available and commenting "In essence, Seven was the
author of its own misfortune".
studies
There has been no major academic study of Seven or biography
of Stokes.
 next
page (Skase and Qintex)
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