Digging the dirt on Seven/WesTrac merger

Here's a bit of a rant on the proposed Seven/WesTrac merger...

When will we stop beating around the bush? Seven's WesTrac deal is nothing short of dodgy, fed purely by one-eyed self-interest. Ringleader Kerry Stokes has demonstrated his desperation to seal the deal by offering to forfeit $115m if WesTrac fails to meet financial milestones. While short-term financial bottom-lines might be kept happy by his cynical sales pitch, staff and management of the media group may not.

You'd be hard-pressed to pair two more polarising businesses if you tried. What strategic gain could possibly be satisfied by fusing the grit and dirt of an earth-moving equipment business with the glitter and glamour of television and the web? Unless it intends on injecting its entire programming schedule with gardening and renovation shows, the proposed merger is commercially and strategically farcical.

If the deal goes ahead, it bears a potentially damaging impact on Seven's core business - creative media. Investment banks' tightening grips on the reins at rival networks have already contributed to the decline in quality programming and ultimately ratings. Then, when ratings drop, the bankers at the helm question the network's programming direction. Creating an affiliation between businesses of these types will invariably detriment Seven in the long-term. Staff within will no longer perceive their employer to be a hub of flair and creativity, but rather a mere revenue raising tentacle of a disinterested financial mega-beast.

But even if I'm misguided in those assumptions, it's impossible to ignore the questionable "independence" of those called upon to assess the deal. The clubby nature of client senior management and consulting firms, like Deloitte, lays the foundation for all sorts of ulterior motives to drive the outcome of risk assessment. If nothing else, it compels them to focus purely on the short-term bottom line, not the bigger picture.

Either way, it's a win-win situation for the penny-counting Stokes. If the deal goes through, he gets his way. If it doesn't, his understated earth-moving business has garnered priceless publicity in commercial and consumer markets. Whichever way the votes point, his personal coffers are bolstered.