HT&E is about to spend its war chest on buying Grant Broadcasters - so now what?
The takeover of Grant Broadcasters will bring HT&E's Australian Radio Network into the regions. And there are surely more moves to come
Welcome to Unmade, mostly written on Friday afternoon, UK time, which would probably have been while you were sleeping in Australia, unless you had a big one to start the weekend. In which case, good on you.
Happy Start A Rumor Day.
The bogan Walkleys
Before we get into today’s main topic, which is HT&E’s takeover of Grant Broadcasters, an addendum to yesterday’s observations about The Kennedy Awards.
The trophies for best dressed attendees, and the questionable long form reporting award for former political operative Peta Credlin turned out to be the least of it.
The Guardian’s Weekly Beast column revealed that one of the event’s winners - Michael Roddan of the Australian Financial Review, who was awarded in the finance reporting category - was thrown out by the organisers after making a joke on stage. He described the event as “the bogan Walkleys”. Which was funny because it was kind of true.
Roddan’s ejection seems like extraordinarily bad judgment for an organisation that presumably champions free speech. And the overreaction means that anybody who missed the joke at the time will now know it. I’ve a feeling the new nickname will stick.
HT&E buys Grant Broadcasters
Well, that was a lucky guess. As regular readers may remember, a few days ago I offered some thoughts about what HT&E might do with its pile of money.
One option, I suggested, was for the company - which has settled its dispute with the Australian Tax Office, leaving it with money in the bank - was to buy Grant Broadcasters.
Yesterday, the company announced exactly that deal to the ASX. Via its audio arm, Australian Radio Network, HT&E is buying Grant Broadcasters for $307.5m, in cash and shares. Considering HT&E’s own market capitalisation is just under $530m, that’s a sizeable acquisition.
My prediction wasn’t as impressive as it might sound by the way. It was just one of the possibilities I highlighted. In that same piece, I also speculated upon potential HT&E tie-ups with outdoor company QMS, or even Seven West Media.
For HT&E, it’s a deal that makes absolute sense at the right price. The main variable was around the willingness of the Cameron family to sell the radio company just before it celebrates its 80th anniversary.
With that rubicon crossed, HT&E is the best placed of the commercial radio players to make a purchase work.
Southern Cross Austereo already owns regional radio stations, and would have been locked out of the deal in many regional markets because of the rules banning ownership of more than two licences in any market.
Nine Radio is focused on talk radio, while Grant is mainly music stations.
Which left either Lachlan Murdoch’s Nova Entertainment, or ARN. And while Nova has been an excellent investment for Murdoch, there has been no sign that Murdoch is interested in further radio purchases.
So that left ARN. It will now be a direct competitor to Southern Cross Austereo not just in metro markets, but in the regions too.
SCA seems to be in a spot of bother at present, as it happens.
In Sydney, the host of Triple M’s breakfast show Lawrence Mooney has gone missing. And 2Day FM’s The Morning Crew, currently consisting of Dave Hughes (who has yet to follow through on his commitment to move from Melbourne to Sydney), Ed Kavalee and Erin Molan, are the latest in a long line of presenters to fail to make ratings headway. They’re currently stuck on a 2.9 per cent audience share.
In Melbourne, SCA’s Fox FM breakfast show of Fifi Box, Brendan Fevola and Nick Cody is also struggling in the ratings on a 4.7 per cent share, which must be close to an all time low. And the company’s new Triple M Melbourne breakfast show, presented by Marty Sheargold is on a share of just 3.6 per cent. Every network has ups and downs, but rarely have there been so many downs at once.
The SCA radio management appear to have gone to ground. Calum Jaspan mentioned in this week’s Mumbrellacast that the company declined to put up a spokesperson to talk to Mumbrella about this week’s latest ratings numbers, which would normally be a routine obligation. I’m aware of another trade press title that SCA has stopped sending press releases to altogether. And since starting Unmade, I’ve heard from SCA just once - to offer a statement rebutting reporting in the Sydney Morning Herald about declining TV revenues since losing the Nine affiliation.
By contrast, ARN has gradually tightened its hold on the most important two radio markets of Sydney and Melbourne. The Kyle & Jackie O Show dominates FM for ARN’s Kiis FM with a 10.7 per cent share, while sister station WSFM’s Jonesy & Amanda aren’t far off with a 7.9 per cent share.
In Melbourne, ARN’s Gold 104.3 has the FM market leader with Christian O’Connell’s breakfast show.
So SCA could do without the arrival of its chief tormenter in the regions too.
On the face of it, SCA will still, slightly, be the larger of the two, with just under 100 stations under the Hit and Triple M banners. ARN is buying 58 stations across 33 markets.
One likely early consequence is that some of Nova’s and Nine’s metro voices will in time disappear from syndication on Grant stations.
Where Grant rebroadcasts highlights shows from the likes of Nova’s Sydney breakfast duo of Fitzy & Wippa and drivetime team of Kate Ritchie, Tim Blackwell and Joel Creasey, expect those to be replaced by Kyle & Jackie O and O’Connell. I wonder how long Ray Hadley’s voice, piped in from Nine’s 2GB, will remain on Grant stations for too.
I also doubt this is the end of the deal making. Arguably HT&E will become an even more attractive asset, with an audio footprint in both metro and regional.
It’s not a dissimilar proposition to that of Seven West Media, now the company is swallowing its regional affiliate Prime. You could still see the two coming together.
And remember that the owner of outdoor firm QMS - private equity company Quadrant - has also talked about the synergies between outdoor and radio.
One piece of recent history to bear in mind was that the acquisition of Pacific Magazines by Bauer Media Australia was a precursor to the magazine giant in turn being snapped up by private equity company Mercury Capital.
Each time one of the orphan media assets is removed from consideration, the permutations become a little simpler. Now we can take Grant off the list.
But there’s more to come in this round of consolidation. News Corp is likely to make big moves around Foxtel. SCA will eventually find a buyer for its regional TV stations. And it feels like Seven is far from done.
The wheels are all turning.
Please do let me know what you think to firstname.lastname@example.org, or via the comment button.
Incidentally, some of my writing about HT&E’s options went only to paying subscribers to Unmade. To make sure you don’t miss out on any of my exclusive analysis - and support independent journalism in the process - please subscribe.
And have a fantastic weekend.
Proprietor - Unmade