Gina Rinehart, Australia's wealthiest individual, has provided the funding for former Seven West Media executive Bruce McWilliam to acquire an almost 10% stake in Southern Cross Media, the company that owns the Seven Network, Triple M and Hit radio brands, and West Australian Newspapers. The arrangement, valued at approximately $26 million, does not grant Rinehart a direct ownership interest in Southern Cross, but she could assume control of the shares if McWilliam violates the terms of their agreement, as disclosed in an ASX filing on Wednesday.
Rinehart's Return to Media
This deal marks Rinehart's re-entry into the media sector after a previous foray over a decade ago, when she purchased a 10% stake in the Ten Network and a 15% stake in Fairfax Media, both of which she later divested. Fairfax Media, publisher of the Sydney Morning Herald and The Age, merged with Nine Entertainment in 2018 to form Australia's largest integrated media company.
Australia's media landscape is already heavily influenced by another billionaire, Rupert Murdoch, whose News Corp Australia, though headquartered in the United States, controls the majority of the country's newspaper mastheads and Sky News Australia. West Australian billionaire Kerry Stokes remains the largest shareholder in Southern Cross Media, which was formed through the merger of his Seven West Media with Southern Cross earlier this year. The combined entity owns Perth's The West Australian, Weekend West, thewest.com.au, and the digital network PerthNow.
Stokes' Role and the McWilliam-Rinehart Investment
Stokes stepped down as chair after the merger, but his family retains a 20% stake in the company. The McWilliam-Rinehart investment now represents the second-largest holding in Southern Cross, trailing only Stokes' share. Documents submitted to the ASX on Wednesday reveal that Rinehart's companies, including Hancock Prospecting and various subsidiaries, provided the majority of the funding for McWilliam's purchase of a 9.73% stake. According to the filings, these entities have a 'relevant interest' in a combined 9.5% stake, and Rinehart is considered a substantial shareholder because her finance company has the power to control the disposal of the shares under an agreement dated 16 April, giving her voting power equivalent to 9.5%.
McWilliam, a former commercial director at Seven West Media and a close associate of Stokes, acquired shares worth $11.2 million and $14 million in recent weeks, largely financed by loans from Rinehart. 'I believe in the company and the shares came up at a good price given what they were before the merger,' McWilliam told News Corp when he purchased a tranche of shares last month. 'They were almost half down and it's a top TV network and strong radio network, both with national platforms.'
Market Performance and Political Influence
Since the merger, Southern Cross has reported a 1.5% decline in total revenue to $1.008 billion for the half-year ending December. News Corp, Nine Entertainment, Southern Cross, and Australian Community Media collectively control over 80% of the market. Rinehart is an influential political voice, having recently called for screening immigrants' social media and financially backing right-wing movements, including purchasing a plane for One Nation leader Pauline Hanson. Last financial year, Hancock Prospecting donated nearly $900,000 to the right-wing political campaign group Advance, according to data released by the Australian Electoral Commission in February.
