Under a media law known as the reach rule, TV operators are prevented from broadcasting across more than 75 per cent of the population. Another regulation, the so-called two-out-of-three rule, prohibits anyone owning a TV station, radio network and newspaper in the same market.
Many people argue that in the era of the internet, slicing and dicing the media according to "old media" definitions is irrelevant.
For their part, the regional TV networks including WIN want the reach rule scrapped because they know the withering effect technology will have on the value of their TV networks.
The reach rule stops the capital city networks from broadcasting to regional markets, so they sell their programmes to regional affiliate networks instead, such as WIN, Prime and Southern Cross.
But things are changing. The Seven Network is already streaming its shows over the internet and other commercial networks have similar plans. Essentially, the capital city networks will be able to bypass the regionals all together.
The best hope the regional TV networks have of long-term survival is to merge with or be acquired by one of the capital city networks if the laws changes. This is what Bruce Gordon is getting ready for. The stakes he owns in two of the three commercial networks will buy him a seat at the negotiating table. They will make it difficult, although not impossible, for the capital city networks to do many merger deals without his say so.
This is important, because WIN's main regional rival Southern Cross has held merger talks with Nine in the past and presumably would be in the box seat should sector consolidation get under way. This would be a disaster for WIN, because it gets most of its programming from Nine.
Gordon's career in entertainment began early. After leaving school at 14, he began juggling to attract customers to his father's fruit stall in Sydney's Pitt St. After a stint as a stage magician he moved into theatre management, which brought him into contact with Rupert Murdoch and the then-owner of Channel Nine, Sir Frank Packer, which led to a career in TV, ultimately joining Paramount Television in the US.
Impressively, it was while holding down a full-time job in TV sales at Paramount and living overseas that he built up his TV empire, starting with the purchase of a single TV station in Wollongong south of Sydney from Rupert Murdoch.
Gordon's purchase of the Ten Network can hardly be considered a successful investment. His stake is currently worth about A$80 million - about a seventh of what he paid for it. But the stakes in Nine and Ten are about more than short-term gains.
If a media merger frenzy does get under way, Gordon will be pulling strings from Wreck Hill Estate, his 10ha estate in Bermuda.
Opportunistic takeover
Australian investors have been thinking about Bermuda for another reason as well.
Bermuda-based investment vehicle Scepter Partners lobbed a A$7.1 billion takeover offer for oil and gas producer Santos.
Behind the bid are nine royal families from the Middle East and Brunei who have spotted an opportunity to scoop up the troubled energy group at a discounted price.
Santos has been under pressure from tumbling oil prices and mounting debts racked up to support its 30 per cent stake in a A$22 billion gas project in Queensland.
Before the takeover bid sent its share price surging, Santos shares had lost almost 60 per cent of their value over the past year.
The takeover offer is a friendly one - Scepter hoped to win the company with the directors' agreement - but the board knocked them back.
The board is in the midst of a strategic review and in rejecting the offer, chairman Peter Coates said the review will consider all options, including asset sales and a capital raising.
The bid, they said, didn't reflect fair value for Santos' assets.
Maybe so, but the board had better hurry up and show shareholders it has a plan to restore the health and fortunes of the company.
