Billionaires and their love affair with media

Is it the high profile or something else?

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published April 19, 2013 12:09 pm AEST

Why is it that billionaires seem to gravitate towards owning media assets? Is it their egos, or something completely different?

Australia's billionaires seem to have a natural affinity for media assets. James Packer inherited his media assets from his father Kerry, but has moved away from media, focusing on gaming and casinos, through his holding in Crown Limited (ASX: CWN). But he still retains a substantial stake in TV broadcaster, Ten Network Holdings (ASX: TEN). Ten has an abundance of billionaire shareholders on its register, including Packer, Lachlan Murdoch, Gina Rinehart, Bruce Gordon and reportedly Kerry Stokes.

Ms Rinehart also has a 10% stake in Fairfax Media (ASX: FXJ), and the Australian Financial Review (AFR) today reports that Melbourne Billionaire fund manager, Alex Waislitz has been buying a small stake in Fairfax. The AFR believes that Mr Waislitz sees the company as undervalued, and started buying shares in the company late last year, after the stock hit a record low of 36 cents. Fairfax shares are now trading at around 62 cents.

Perhaps the least well known billionaire, Bruce Gordon, is the owner of the regional TV network, WIN Television, and the largest single shareholder in the Ten Network with an estimated 14% holding.

Lachlan Murdoch is of course the son of Rupert Murdoch, chairman of News Corporation (ASX: NWS), which holds a conglomeration of media assets including newspapers, publishing, movies and TV. Not to be outdone, Kerry Stokes holds a 68% shareholding in Seven Group (ASX: SVW), which in turn owns 35% of Seven West Media (ASX: SWM) and 11% of Prime Media (ASX: PRT).

Between them, the billionaires have significant control over Australia's newspapers, television stations and radio as well pay TV operator, Foxtel. Perhaps their interest in media stocks gives them more say in how the country is run, through easier access to government officials and the ability to control, to a limited extent, policy decisions that can be beneficial or detrimental to their wealth.

Foolish takeaway

It seems likely that Australia's billionaires will continue their love affair with media assets. For investors, rather than just being entertaining, their moves in the media sector could signal opportunities.

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