Gina Rinehart and Southern Cross Austereo: what do billionaire media buyouts mean for democracy?

Rinehart’s Southern Cross Austereo move is not her first foray into the Australian media industry. Cameron McTernan unpicks why the wealthy invest in media companies when they often offer poor returns to investors?

Gina Rinehart, Australia’s richest person and one of the world’s most powerful mining magnates, recently helped finance a deal to acquire a 10 per cent stake in Southern Cross Austereo – the second largest commercial media broadcaster in Australia. The company owns many major media brands including the Seven Network, West Australian Newspapers and Triple M.

The announcement was followed by an eight per cent increase in share prices for the company – an uncommon feat in the media industry, which is often overlooked by speculative investors.

The deal – worth about $26m – doesn’t give Rinehart an immediate stake in the company. But she could secure a nine per cent share if her backed partner, former Seven network executive Bruce McWilliam, defaults on their agreement.

Billionaires and the media

This isn’t the first time Rinehart has forayed into the Australian media industry, having previously owned stakes in Channel 10 and Fairfax.

But what is it that motivates wealthy business people to invest in media companies, especially when they often offer poor returns to investors?

People who own news businesses have the potential to steer the actions of the company towards their own interests. This can include affecting how stories are framed so their political interests are prioritised. They may........

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