Consolidated Media Holdings Limited
Packer's Consolidated Media Taxing Situation, by Greg
Tingle - 27th December 2010
Consolidated Media Holdings are taking the fight to
the Australian Taxation Office. They are following
the other high profile case of man VS ATO - Paul "Hoges"
Hogan. The firm has been fighting in the Federal Court
over the tax treatment of a $1 billion share buyback
transaction some 8 years back, and just last week
it filed more legal claims covering the 6 years to
2008. It ended up in court after the Tax Office rejected
its argument that it should be able to shift tax losses.
Circa 2004 the late Kerry Packer emerged victorious
in the Federal Court, and guess what - the main question
in that particular case was the "legitimacy"
of shifting losses between financial years. Getting
you up to speed, it was October 29 last year the firm,
which owns stakes in the Foxtel, Fox Sports and Premier
Media Group, and employment website Seek, was issued
a revised tax assessment for each of the 6 years to
2008. It's curious timing...exactly 1 year after the
company was handed a revised tax assessment for the
2002 year, the year of the buyback. Back to the present,
Wednesday arvo CMH filed 10 separate lawsuits against
the ATO in its latest chess - art of war manoeuvre
to sidestep paying a tax bill of a cool $22 million.
Consolidated Media is also wrestling to avoid having
to pay a fine imposed for "non-payment."
The latest legal battle came after a 13-month exchange
of formal notices, a procedure used to help find a
mutual understanding of sorts and keep the case out
of court. The ATO has already had plenty of bad PR
this year, after Hogan getting the best of them. For
those of you who don't know, Consolidated Media was
created out of the split of Publishing and Broadcasting
Ltd aka PBL into separate media and gambling companies
in 2007. The vast majority of the tax bill dates back
to when the company was trading as PBL. Details of
the latest dispute were contained in documents Consolidated
Media filed with the Federal Court in Sydney on Wednesday.
The case is due in court for directions before Federal
Court judge Richard Edmonds on February 24. It is
unclear if Crown king of the castle, James Packer
will make an appearance. The associated dispute over
the $1 billion buyback is due to be heard by a different
law man over a 3 day duration commencing on March
7. In that case the court is to decide whether the
proceeds received by PBL from Crown via the buyback
in June 2002 were in face dividends or a capital gain.
Crown Limited bought back 840 million ordinary shares
held by PBL for a total of $1 billion to repay funding
previously provided by PBL to Crown. PBL bean counters,
some of the best in Australia as you might expect,
recorded the payment as a dividend, which is tax-effective
because franking credits can be used to offset tax.
It's a legal tax minimization tactic. The ATO advised
it should not have been recorded as a dividend and
billed the company for capital gains tax. Packer owns
about 50% of Consolidated Media's shares and his mate
and associate, Kerry Stokes owns 24% these days. So
folks, looks like a new type of Australian casino
and gambling war is brewing - one against Australia's
Media Holdings Limited, formerly Publishing and Broadcasting
Limited, is engaged in the business of gaming and
entertainment, television broadcasting and program
production, magazine publishing and distribution and
investments in the Internet, subscription television,
and other media and entertainment sectors. It has
four segments: gaming, television, publishing, and
ticketing and events. Gaming segment operates a gaming
and entertainment facility. Television segment operates
commercial television stations. Publishing segment
is engaged in magazine publishing and distribution.
Ticketing and events segment offers entertainment
venue and event ticketing. In December 2007, the Company
announced the completion of the sale of its 50% interest
in the Hoyts Group to funds advised by Pacific Equity
Partners. In December 2007, the Company demerged its
gaming and media into two separate companies on December
12, 2007. On December 10, 2007, Crown Limited acquired
Address: Level 2, 54 Park Street, SYDNEY, NSW, AUSTRALIA,
(02) 9282 8000
Fax: (02) 9282 8828
of Consolidated Media Holdings Limited
Consolidated Media Holdings Limited (CMH) is a media
investment company, investing in key new media.
has a 25 per cent investment in Australia's leading
subscription television business FOXTEL and a 50 per
cent investment in subscription television content
provider Premier Media Group, producer of leading
sports channels including FOX SPORTS 1, FOX SPORTS
2 and FOX SPORTS 3.
to the demerger of PBL into Crown and CMH in November
2007, PBL was one of Australia's largest diversified
media and entertainment groups. Its market capitalisation
of more than $11 billion placed it among the top 25
companies listed on the Australian Stock Exchange
at the time.
PBL group’s core businesses and investments
were gaming and entertainment; with strategic investments
in television production and broadcasting; magazine
publishing and distribution; and key digital media
and entertainment businesses. PBL owned and operated
two of Australia’s leading gaming and entertainment
complexes, Crown Melbourne and Burswood in Perth.
was formed in 1994 in the same year that Nine Network
Australia and Australian Consolidated Press were merged.
The combined businesses were renamed Publishing and
Broadcasting Ltd, and the company’s Australian
Stock Exchange code became PBL.
merged with Crown Ltd in 1999, providing the company
with its first gaming business. It acquired Burswood
Ltd in 2004.
significant expansion of the gaming business occurred
in 2004 when Burswood International Resort Casino
was purchased. A joint venture was also signed with
a major Hong Kong listed company, Melco International
Development, to pursue new gaming ventures in Asia.
The first of these are being constructed in Macau.
October 2006, PBL announced that it had entered into
binding agreements to implement a recapitalisation
of certain of its media interests, including ACP Magazines,
Nine Network (including its interest in Sky News),
its 50% interest in ninemsn and its shareholdings
in myhome.com.au and carsales.com.au. These media
businesses were transferred to a new company, PBL
Media, in which PBL and Red Earth Holdings B.V. (Red
Earth) (a special purpose vehicle incorporated in
the Netherlands and owned by funds managed and advised
by CVC Asia Pacific and CVC Capital Partners (collectively
CVC)) each held a 50% economic interest.
transaction was completed on 7 February 2007. As part
of the completion, PBL received net cash proceeds
of $4.585 billion.
June 2007, CVC converted its notes in PBL Media into
ordinary shares and units representing a 50% equity
interest in PBL Media Holdings Pty Limited and the
PBL Media Holdings Trust. PBL also agreed to sell
a further 25% interest in PBL Media Holdings Pty Limited
(as well as its interests in Ticketek and Acer Arena)
to PBL Media for a total of $725 million.
sale of Ticketek and Acer Arena to PBL Media completed
on 16 July 2007, with PBL receiving $210 million.
The sale of the further 25% in PBL Media to CVC completed
on 10 September 2007, with PBL receiving $526.4 million,
leaving PBL with a residual 25% interest in PBL Media.
May 2007, PBL announced that it planned to demerge
into two pure play listed entities - a gaming business
(Crown) and a media business (CMH). Following shareholder
approval, this took effect on Friday 30 November 2007
and was implemented in December 2007. (Credit:
Consolidated Media Holdings)
Magazines is Australia's leading magazine publisher
and the magazine arm of PBL Media, Australia's leading
media and entertainment company.
Magazines publishes over 60 titles in Australia which
sell nearly 109 million individual copies each year.
They include some of the longest-running and most
successful mastheads such as The Australian Women's
Weekly, Woman's Day, Dolly, NW, TV Week, Cleo, Cosmopolitan,
Madison, Wheels and Ralph
Magazines has expanded into nine other countries,
principally in New Zealand, Asia and the United Kingdom.
It now has a stable of more than 70 international
magazines. Integral to its success are vibrant, information-packed
Wine & Travel
Australian Gourmet Traveller
Gourmet Traveller Wine
Fernwood, Your Healthy Living Magazine
Australian House & Garden
The Australian Women's Weekly
The Picture Premium
Australian Auto Action
Australian Motorcycle News
Men's Style Australia
Aust & NZ Snowboarding
Australasian Dirt Bike
Australian & NZ Skiing
Australian Mountain Bike
Inside Rugby - Programs
Inside Rugby - The Magazine
Rugby League Week
Qantas - The Australian Way
Bounty's Mother To Be Bag
Bounty's New Baby Bag
Bounty's New Mother Bag
Cosmopolitan Hair and Beauty
Good Health & Medicine
Mother & Baby
Pregnancy & Birth
Shop Til You Drop
Shopping For Baby
Slimming & Health
Man Australia has worked with ACP on a number of projects
talent / models
Top Gear boosts magazine garage, by Miriam Steffens
- 13th March 2008
The Sydney Morning Herald)
Magazines has moved to beef up its men's magazines
division, entering a joint venture with the BBC to
start an Australian version of the car lover's magazine
Top Gear in June.
venture, likely to be called Park Publishing, will
be run from ACP's Sydney offices by its head of men's
and specialist titles, Phil Scott.
wants to publish more new titles - one this year -
with plans centering on Australian versions of BBC
Magazines' children's and food titles, or a travel
magazine based on the BBC-owned publisher Lonely Planet.
is the fourth large deal in a year for the BBC, which
had identified Australia as one of its key growth
markets last year.
broadcaster acquired Lonely Planet in October for
about $250 million and took a 25 per cent stake in
the Australian production company Freehand, which
is behind TV series including Missing Persons Unit.
January the pay TV company Foxtel said the BBC would
provide a channel for its new high-definition service
later this year.
month BBC Worldwide, the BBC's main commercial arm,
signed an agreement to provide programs including
The Whistleblowers and The Vicar Of Dibley to the
Gear will be launched with a multimillion-dollar advertising
campaign, with hopes it might sell up to 70,000 copies
a month and reach a wider audience than ACP's best-selling
motoring magazine, Wheels.
publisher also plans a $1 million advertising blitz
to promote a relaunch of FHM next month, aimed at
moving the raunchy magazine more upmarket to stem
bought FHM through its takeover of Emap's Australian
titles last year, but it lost 24 per cent of sales
in the December half as it competed for the same readers
as ACP's own Ralph.
a sign how serious ACP is taking the relaunch, Mr
Scott said the publisher had even "walked away
from around $1 million worth of advertising revenue
from the phone sex market".
Man does have a business relationship with ACP
Man does not represent ACP
Man does not represent Consolidated Media Holdings