Murdoch, RACV AGM

3. Rupert Murdoch, a supportive Saudi Prince and a book deal



By Stephen Mayne

With just one opportunity to ask Rupert Murdoch a question at yesterday's News Corp shareholder information meeting, which topic to choose? After all, you could ask 100 questions and still barely be started with arguably the most fascinating media mogul in history.

After Rupert's "good friend" Steve Askew tested the patience of the old and WASPish audience with a 45-minute presentation on STAR TV, complete with video clips in Hindi and Mandarin, the first shareholder to speak ripped into the performance as "pathetic," something that CBD editor James Chessell reported in today's SMH.

That opened up an opportunity for Crikey to play the good guy by praising the presentations, including an interesting 15-minute slide show from Sky Italia CEO Tom Mockridge, and then make a couple of introductory remarks about what a good turn-out it was in Adelaide compared with the miserable 33 shareholders who registered in New York.

Rupert then made some crack along the lines of "you asked all 33 questions in New York," but he was generous in his answers to my omnibus question about two key relationships that he hadn't commented on publicly. In summary, the exchange went as follows:

Relationship one: Given Super League and all the other grief that came from Telstra under Frank Blount and Ziggy Switkowski, how are relations with the new management team led by Sol Trujillo? Foxtel is the only example of News Corp having a pay TV joint venture with a major incumbent telco, so what does Telstra's big broadband strategy mean for Foxtel given that it could eventually compete directly with Foxtel?

Murdoch: Rupert's answer formed part of what constituted today's Chanticleer column in The AFR. The Telstra relationship was important and complex, but Sol had been too busy to meet ahead of the strategic review. The broadband strategy was similar to the punt by American telcos such as Verizon, but Telstra would be laying new cable on virgin territory, although it was unclear what sort of capacity should be used.

Relationship two: What does the Saudi Prince Alwaleed bin Talal want from News Corp in return for his very strong support of the Murdoch family's ongoing control of the company through his strategic 5.5% voting stake, which was used at the recent AGM. We've already published his biography, but does he want anything else, such as influence over how the company covers Islamic issues?

Murdoch: All he asked for was the book which turned out OK in the end, but he's not after anything else from the company.

Given the very loud support that Prince Alwaleed, reputedly the 12th richest man in the world, has given Rupert, as you can see in this piece from The Street, it is a fascinating disclosure that company resources have been used to return a favour.

The Prince was a non-entity in global media circles before he started buying US media stocks and now he's had a propaganda triumph with the world's second biggest publisher promoting and distributing a gushing biography.

What next? Crikey suddenly becoming a pro-Murdoch advocate in return for Harper Collins publishing a book chronicling the history of our little ezine. It is very surprising that Rupert's disclosure was completely ignored by the media covering yesterday's meeting given that the Prince will probably have a say in the peace deal with John Malone and any future decisions on succession.




24. A friendlier tone from Murdoch's men



By Stephen Mayne

Rupert Murdoch hasn't uttered a private word to Crikey since we politely chatted after the 1999 News Corp AGM, but some of his henchmen were a little friendlier than usual after yesterday's "shareholder information meeting" in Adelaide's newly launched Keith Murdoch House.

Finance director Dave Devoe strolled past during the tea and sandwiches session (there was no wine despite Rupert saying there should be) and formally introduced himself for the first time and then said "thanks for playing by the rules today."

The rules were one question per shareholder and given that the entire occasion was a voluntary affair, it would have been unreasonable to grandstand, especially when it wasn't clear that Rupert Murdoch would be coming back every year. Only five shareholders spoke and the last one got the answer many were hoping for when Rupert committed to returning every year.

Given Rupert's glowing praise for the News Awards the night before, don't be surprised if this becomes an annual management, journalistic and shareholder love-in at the company's brand new shrine to Rupert's dad. Yesterday's meeting was packed with executives from across the Murdoch empire and the two presentations about STAR and Sky Italia were so detailed they were almost suitable for a management conference.

Shortly after Devoe's surprise introduction, the two top managers from the Herald & Weekly Times, CEO Julian Clarke and general manager John Webster, both shook hands and said hello when strolling past, although it was all relatively brief as there is nothing to be gained for a News Corp executive talking to Crikey.

With only Rupert's family group, a handful of shareholders and a few key executives left, it was time to depart the fourth floor venue. However, three journalists were waiting next to the lift for a quick chat so we had a mini press conference for about five minutes, a grab of which turned up on PM last night.

Former Clinton adviser turned Murdoch external relations boss Gary Ginsberg briefly interrupted this presser mid-sentence to say hello, but the highlight was the question about whether News Corp's dividend will be lifted again. The ever loyal veteran News Corp director Ken Cowley, who copped a blast at the New York AGM over his claimed "independent" status, was coming down the stairs and walking past our gathering, so I loudly said to the cameras: "If directors like Ken Cowley would only change their policy, shareholders would get more." WHACK! Uncle Ken let fly with the papers he was clutching against my arm and we both had a chuckle.

Even the lift encounters were polite. The old Richmond Club II cricket team mate Ross Greenwood cheerily said hello going up, even though he's copped plenty of grief for his Channel Nine work on Crikey over the past two years and News Ltd spindoctor Greg Baxter said hello in a packed lift going down, even though he's copped the odd blast for his former role as the chief spinner for James Hardie during its dastardly asbestos dodging restructuring.

All up, it was one of the friendlier moods at a News Corp shareholders' meeting in recent years, which probably reflected satisfaction that any opportunity for some detailed probing was quickly eliminated by 90 minutes of formal presentations in a room with no air conditioning and lunch beckoning.

Rupert never has liked answering shareholder questions and even though that was meant to be the main purpose of yesterday's meeting, less than 10% of the time was devoted to questions and Rupert signalled at the outset that questions would only last for a few minutes.





27. RACV AGM – an embarrassment of riches



By Stephen Mayne, failed RACV board candidate

The RACV held its first AGM inside the plush new $200 million Taj Mahal head office in Melbourne this morning and we had a good debate about some of the structural and financial issues surrounding Australia's richest remaining mutual.

Whilst there wasn't a lot of joy in terms of increased disclosure and better governance, there was plenty of news coming out of the meeting as the board announced a Commonwealth Games sponsorship, the $13.5 million acquisition of the prestigious Cape Schank golf course and a substantial increase in roadside member benefits as it shares the fruits of its unprecedented financial success. Even the 1.1 million circulation RoyalAuto magazine will be expanded and printed on better paper from next year.

The 30% stake in Insurance Manufacturers Australia joint venture with IAG is obviously worth far more than the $158 million book value given that it returned a dividend of $95.8 million last year. However, both the chairman Clive Hall and the finance director declined to speculate that it was worth more than $1 billion and the RACV in total was actually worth about $2 billion, not the $757 million claimed in the balance sheet. But Hall did rule out the sale of the stake because he said RACV needed to retain control over its brand and how it was distributed in Victoria.

The next big issue was the value of the $200 million Taj Mahal at 501 Bourke St, the highest point in Melbourne's CBD, which officially opened almost a year late on July 4. Directors have valued all buildings at just $91 million and total properties at $115 million so it looks like members have already taken a $100 million loss.

However, the finance director refused to disclose the actual valuation of the building but said it was broken into two parts because nine floors were commercially leased and the RACV Club component was valued using hotel industry assumptions.

The massive investment has led to a sudden 2,000 increase in members to 21,000 and a renewal rate of 93%, whilst trading revenue has tripled in the new venue but total Club revenue was still only $17 million last financial year.

Given that the 1.3 million roadside service members such as Crikey contributed $112 million last year, there remains a fundamental issue about who actually owns Australia's richest mutual. Clive Hall refused to answer the question as to whether roadside service members would share in any demutualisation windfall, but he did point out that the original holding company was formed by the Club more than 100 years ago, with roadside service coming along as a subsidiary 20 years later.

Members startled heckling a bit when Crikey asked the board to clarify this ownership question so a decision could be made to either treat roadside members as genuine equals or completely disenfranchise them, rather than the current halfway house.

At the moment, the RACV Club gets nine of the 15 board seats and they've only had three contested elections in 32 years. Club members can vote on roadside service member elections but not vice versa and only Club members can vote to change the constitution which would unravel this gerrymander.

If roadside members were completely shut out, any demutalisation would see Club members each receiving a windfall of about $10,000. Quick, join now before they reach maximum capacity in the booming new facility.

Crikey's last point was a request to allow a 200 word candidate statement in elections so that members know why people are standing. Clive Hall also rejected this, saying that the RACV will only provide so much support to all candidates. This was also one of several occasions when comparisons were made with the chaos of the NRMA, or "what happens north of the Murray" as one member described it.

Copyright © 2022 The Mayne Report. All rights reserved

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