Billionaires and their love affair with media

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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 (CWN.AX). But he still retains a substantial stake in TV broadcaster, Ten Network Holdings (TEN.AX). 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 (FXJ.AX), 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 (NWS.AX), 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 (SVW.AX), which in turn owns 35% of Seven West Media (SWM.AX) and 11% of Prime Media (PRT.AX).

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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