Big news in our little space this week with the sale of AIBM, owner of Eureka Report and Business Spectator to Rupert Murdoch’s News Corporation for a reported $30 million. Congrats to Kohler and the team. For the past seven years that man has worked harder than anyone I know. He writes for Eureka and Business Spectator. He’s on the ABC news every night. He hosts the Inside Business program every Sunday. And runs a business on the side. How you fit sleep in around that schedule is beyond me.
Kohler has built a significant business and, now in his sixties, has every right to cash out. Who would begrudge him that?
He’s got himself into a pickle, though, trying to defend the sale to News Corp. I would have simply said ‘they offered me the most money’ and left it at that. Instead, he has tried to argue it’s the best home for Eureka and Business Spectator:
When I started Eureka Report seven years ago it was with the aim of building an independent voice for Australian investors – to both defend and inform them.
When Robert Gottliebsen, Steve Barthomoleusz and I started Business Spectator four and a half years ago it was with a similar aim for the nation’s business people. We called our company Australian Independent Business Media.
Today AIBM is joining the News Corporation stable for the simple reason that this is the best way for us to continue our mission.
We remain passionately independent of commercial interests, but being part of a global media company will give us the support and resources to grow the business and better serve all of our customers, both readers and advertisers.
For a start, Eureka Report has never been remotely independent. Three quarters of the content comes from contributors who have their own barrow to push (Marcus Padley, Roger Montgomery, FIIG, etc etc). There’s nothing wrong with that. It’s made perfectly clear to all and sundry and customers presumably subscribe with their eyes wide open. But it’s a bit rough to call it ‘independent’.
To even suggest that you are ‘passionately independent of commercial interests’ when part of the News empire, though, simply detracts from Kohler’s considerable credibility. Today’s Rear Window in the Financial Review reproduced this extraordinary passage written by Kohler in 2005:
News Corporation is nothing but a badly performing business mostly run by untrustworthy people. It’s time those who regard Rupert Murdoch as some kind of business hero thought again. He is a disgrace.
I’m guessing those are closer to his real thoughts on the sale counterparty.
There’s nothing to be ashamed of Alan. You’ve worked extremely hard to build your business and sold it for a great price. Well done and congratulations. Just do us a favour and quit trying to dress it up as something it’s not.
19 thoughts on “Kohler Sells To News, 'Remains' Independent”
Well said, Steve.
Great post, Steve. I think the rules say that Intelligent Investor is not ‘independent’ because our company offers sharemarket advice and also runs a fund, is that right?
Yep, we’ve taken a conservative point of view but that’s related to us holding an AFSL. AIBM doesn’t have an AFSL, so they can say what they like about independence.
Steve, I agree with your essential point that Alan et al have made a largely commercial decision here. They counter with a view that the business is undercapitalised and they needed to do something.
My perception is that the likes of Kohler, Gottliebsen and Bartholomeusz are largley independent (and sincere)in the expression of their opinions, but your point about the “agendas” of a number of their contributors is right. You’re also right in saying this is fairly upfront.
Eureka and TII are very different publications. The former provides a wide-ranging mix of information, but you certainly can’t look for a “house view” on anything. And (in my view) you’d never look to Eureka for mainstream equity investment recommendations – the contributors turnover regularly and have no commitment to on-going coverage.
But it does make me think there is such an opportunity for TII to broaden its coverage a tad, rather than being solely listed equity focussed. And what a time to make a move – with equities now forming a smaller piece of SMSF and other private portfolios. Perhaps Walnut might evolve in this direction? But I see the difficulties – how to gain the capability in an affordable way, without surrendering independence!
Firstly, Steve, great post. Unfortunately you stole my intended blog piece for the week.
The idea that Eureka was ever independent, or that it will continue to be so, is marketing gumf. They have never been independent of FIIG and co, and the idea they can be independent of their new owners is just plain silly.
Kohler and co are men of high integrity and talent and will probably continue to be so. But their recent arguments show that confirmation bias can play tricks on the minds of the best of us.
Geoff – thanks for your suggestions. We are constantly exploring the direction in which Walnut may evolve. As you say – it is a matter of having the resources without needing to sacrifice the badge of independence to get them.
Have enjoyed some of Eureka’s material in the past and that is what it shall now remain, the past. The irony of News buying a business like Eureka is that many of the subscribers will now not renew.
Once upon a time i too received Eureka Report however after a short period of time it seemed too generalised and contradictory to continue with. As well I didn’t invest in Resources which was covered a lot then. Another reason not to continue.
TII is a company that my father began with, towards the end of his life, and i have found it to be much better for my purposes. I call myself a lazy investor and check on my portfolio once every now and again. This approach seems to have worked very well for me.
Eureka Report didn’t seem to stick with any principles that I could discern and with so many others following Alan Kohler on tv (which i didn’t) it occurred to me that the crowd followed him and I don’t follow crowds. Much prefer TII and have enjoyed investing this way for many years.
Thanks everyone on the team – your efforts have settled my mind many a time and helped me appreciate the value of patience, diligence and good research. As an ordinary investor this has educated me a lot.
Thanks Stephanie … we’ll have to get you to come and work in the marketing department!
Steve, well said! Unfortunately, I don’t think you will be getting an invite to his Christmas party this year. Given the current state of the Journalism Industry and his age – we should give him some slack for being a bit desperate.
You have to laugh, I just received this email from the Business Spectator :
Business Spectator sponsored message: See how Barwon Health is revolutionising patient care.
and the link to the online version of the email, which doesn’t identity that it’s a ‘sponsored message’.