BotW: Publicis goes shopping; NRL goes to market; and Disrupt Radio goes down
Welcome to Best of Week, written on a scorching (for Tasmania) Saturday in Evandale after a hectic week in Sydney as we completed the Mumbrella takeover.
Today: Will Atomic 212’s deal be the last one of its kind?; NRL sets a timeline for TV rights; Disrupt Radio faces a winding up application; and The Market Ltd rebrands yet again.
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Atomic smitten
Each time an agency makes a big financial exit, it feels like the last one. There was another one of those on Tuesday.
When BMF sold to Photon Group for $25m in 2007, it seemed like the end of an era. Then a few months later Photon bought Naked Communications for $37m. However, the Photon bubble burst when the Global Financial Crisis arrived.
Then Aegis came knocking for Mitchell Communications in 2010, bought from the late Harold Mitchell in a $363m payday that was repeated two years later when Dentsu in turn bought Aegis.
For a while it felt like there would never be another big media agency exit. The rise of data as the main game looked like it would be too expensive for indies to play. But when the platforms got the upper hand, it levelled the playing field for the indies.
Publicis Group bought media company Match Media in 2015 and rebranded it to Blue 449 before merging it into Spark Foundry.
The next source of local competitive tension in the bidding was the consultancies. Accenture bought The Monkeys for $63m in 2017.
And the creaking business model of the global holding companies has since reduced their appetites for acquisition. They want fewer agency brands not more, which is why they’ve been merging so many of them, WPP in particular.
Which brings us to this week’s against-the-trend news that Publicis Group has bought Atomic 212. No price tag was shared although the number of $35m-$50m has been speculated. Given the rumoured interest of Accenture, among others, my guess is that the number was higher.
However, the deal does not necessarily signal a change of the vibe. More, it reflects the momentum globally and locally of Publicis, which has been taking enough share from its rivals that it can use an acquisition as a means of managing client conflict.
Still, it’s a great deal for Atomic 212. For an agency that was on its knees after client Dick Smith went into administration in 2016 and then faced accusations of cheating in industry awards by former boss Jason Dooris in 2017, it’s a hell of a turnaround.
NRL on the block
This week saw the NRL put a timeline on its next TV rights deal.
Although Nine and Foxtel’s current arrangement runs until 2027, NRL chairman Peter V’landys told The Daily Telegraph that he wants “something done in the middle of this year”.
While everything the impressario V’landys says should be taken with a pinch of salt, that goes doubly for the rights. He’s doing his best to talk them up as he needs competitive tension. In September he used The Sunday Telegraph to float the balloon that Paramount’s Network Ten might be interested without any obvious justification for doing so.
The biggest unknown is the potential interest of a streamer. While the anti-siphoning law gives the free-to-air broadcasters first look at broadcast rights, the streaming rights will be a free for all.
Played wrongly by the NRL, that devalues the TV rights. Unless, that is, a global platform has such a giant appetite that it buys only the streaming rights, and NRL does not make the TV rights available at all.
Imagine a scenario where the only place to watch the NRL in Australia is on Netflix or Amazon’s Prime Video. More likely though, would be for a smaller package like the finals, or Grand Final.
A complication for V’landys is Foxtel’s change of ownership to DAZN. That will take several months to wrap up. There’s certainly no chance of getting a parent company guarantee out of current owners News Corp and Telstra. So I suspect he'll have to wait on that.
The boldest move would be for Nine to make an early play, and offer a blockbuster bid across its TV assets and Stan, while Foxtel is in strategic limbo. To get it done might require something approaching a billion dollars a year from Nine. That’s a big ask for a company currently only writing revenue of a little more than $2.5bn per year, particularly when chief sales officer Michael Stephenson just walked out of the door to ARN Media.
I doubt that Nine move is currently in play. Otherwise V’landys would not be mouthing off in the press.
Disrupt Radio faces winding up hearing later this month
The end for the Disrupt Radio disaster now looks like it’s just 25 days away.
As we revealed on last night’s episode of MediaLand on ABC Radio National, Disrupt Radio is facing an application for a winding up order. ASIC has posted that the hearing will be in Melbourne on February 26.
The application comes from Sports Entertainment Network, which was renting studio space and access to its DAB spectrum to Disrupt Radio. It locked Disrupt Radio out of the studios when it stopped paying its bills. Staff haven’t been paid since July.
Among Disrupt Radio’s directors is former ABC boss Michelle Guthrie, who also chairs the business. When I asked her about the situation last August she said in a brief email: “It is a serious allegation that disrupt is trading insolvently. And absolutely untrue.”
The proceedings may well prove to be an opportunity to understand how Guthrie and fellow directors Benjamin Roberts and Thomas Cockle fulfilled their legal duties as directors.
Unmade Index - HotCopper… The Market Herald… The Market Limited… Now it’s Gumtree
Perth-headquartered basket case The Market Limited yesterday ended its short life under that brand name close to an all-time low market capitalisation.
From Monday, the company will be known as Gumtree Australia Markets Limited. It will be the fourth name for the publishing group in less than five years.
The company rebranded from HotCopper to The Market Herald in June 2020 at the height of its ambitions under former CEO Jag Sanger.
Sanger led the purchase of Gumtree, Carsguide and Autotrader for $27m before being ousted in an ugly boardroom battle in December 2022. After his departure, the board rebranded the company again to The Market Limited in November 2023.
The company’s current market capitalisation is $43m. The 14c share price is about a quarter of what it was trading at when Sanger was ousted.
In its last annual report, The Market disclosed that it had lost $6.9m on a turnover of $91m during its financial year; and owes $61m, up from $54m the year before. Its liabilities are bigger than its assets to the tune of $38m
Elsewhere on the Unmade Index, Friday was a good day for Australia’s main two audio companies with Southern Cross Austereo rising by 1.6% and ARN Media by 1.2%
The Unmade Index lost 0.8% to land on 457.7 points.
Final thoughts: WPP adrift; hacking scandal reanimated; fighting for the web; and holding banks to account
How WPP lost its way
While Omnicom buys Interpublic, and Publicis surges, WPP has been falling behind globally.
There’s a fascinating thread on the Advertising subreddit, discussing the performance of WPP’s CEO Mark Read, who has seen the company’s market capitalisation halve since taking charge in 2018. More recently, his back-to-office mandate has lost him the dressing room, with staff mutineering.
Shareholders rather than staff will decide Read’s fate, but he seems to be in his final days.
Nine funds anti-News Corp drama
Fascinating to see that Nine’s streaming service Stan is co-funding a docu-drama about phone hacking by News Corp’s UK tabloids.
One of the stars of The Hack will be Toby Jones, playing former Guardian editor Alan Rusbridger. The Guardian did much of the early reporting which eventually led to the closure of the News of the World
Jones was also the star of the UK docu-drama Mr Bates vs The Post Office, which last year turned a long simmering issue of postmasters wrongly accused of stealing into a scandal and inquiry when the show caught the public’s imagination.
With News Corp only last week settling its Prince Harry court action against The Sun, The Hack threatens to reignite what News Corp would have been hoping was be the end of the matter.
It’s interesting that News Corp’s biggest local rival Nine is helping fund the drama, and fascinating that Stan does not appear to have done any local publicity around the commission.
Banking on it
Speaking of News Corp, it launched an excellent campaign across its mastheads this week - “People Before Profit”.
It’s proper public service, campaigning journalism to force through law changes to make the banks go to the same lengths to protect consumers from scams that the must in other parts of the world.
Considering the banking sector is also a major source of advertising, it’s brave campaigning too.
Keeping it open
A call from the boss of the IAB in the US this week is worth paying attention to. David Cohen used his keynote at the IAB’s annual meeting to call for advertisers to support the open web. As the platforms capture the ad dollars, the demise of the open web is becoming a real issue. We should be talking about it more.
Time to leave you to your weekend.
I’ll be back on Monday in podcast form with a post-deal chat with Atomic 212 chairman Barry O’Brien and Michael Rebelo, CEO of Publicis Group.
And if you’d like to hear a little more from me this weekend, last night’s episode of MediaLand on ABC Radio National is now available in all the usual podcasting places. Vivienne Kelly and I had a good guest this week - ARN Media chairman Hamish McLennan. We talked media law reforms, the state of the radio market and (of course), the latest on The Kyle & Jackie O Show.
On the show we also broke news of Disrupt Radio facing the application for a winding up order, discussed the next NRL rights deal, and the Grace Tame T-shirt coverage.
Have a great day.
Toodlepip…
Tim Burrowes
Publisher - Unmade and Mumbrella
tim@unmade.media