Start the Week: Eye of the Tiger; Day of the Cat; End of Business Insider; problematic pie charts
As the media year kicks off, details have emerged of Antony Catalano's plan to recycle Prime Media; and Nine is shutting the doors on Business Insider
Welcome to Unmade, written while you were sleeping on Monday morning.
The UK timezone proved to be a convivial one for watching the Nadal-Medvedev game. Wasn’t it terrific? We’ll turn to the tennis ratings further down.
Today’s writing soundtrack: John Coltrane - A Love Supreme.
We’ve reached the last day of January. Which means the year is already 8.5% over, assuming you’re a proponent of the Gregorian calendar.
Mind you, the media and marketing industry, whether it realises it or not, seems to prefer the rhythm of the traditional Chinese New Year, particularly when the lunar cycles align.
The first Monday after the Australia Day public holiday marks the day the media and marketing industry gets back to work. Here’s hoping the Year of the Tiger, which starts tomorrow, is less eventful than the Year of the Ox proved to be.
Today: Catalano’s ASX play; The demise of Business Insider and The Oz’s pie chart problem.
Catalano’s plan for Prime - it’s real estate
You may recall that last week I wrote about the manoeuvrings for ownership of the husk of Prime Media, now that Seven West Media has completed the takeover of its regional TV operation.
Today things became a little clearer with the publication of a piece in The Sydney Morning Herald and The Age which appears to have the sort of detail that could only come from somebody close to the deal.
The interest from Prime shareholders Antony Catalano and Alex Waislitz in using the old Prime (now known as PRT Company) is not in the company as a means of floating their Australian Community Media regional newspaper portfolio after all. It’s about their push into the real estate market.
Newspapers may be The Cat’s first love (he started his career as a beat reporter on The Age), but real estate has been his grand passion.
He learned the real estate ropes at Fairfax Media’s The Age, first on the editorial side as property editor, then running the newspaper’s lucrative real estate advertising section. It was where he built his relationships with the real estate agents who gatekeep how their clients advertise their properties for sale, and where he built an understanding of how the market really works.
And after he was made redundant by Fairfax, 2010 saw him launch The Weekly Review in Melbourne, which was the making of his first fortune. He eventually sold the business to Fairfax and came back into the fold, leading the ASX float of the company’s Domain, which is currently worth a little under $3bn.
By the time he left a second time (acrimoniously), he and Waislitz were in a position to pick up ACM for a bargain price after Nine merged with Fairfax and wanted to get out of local publishing.
The part that was puzzling me last week was how Catalano would make ACM attractive enough to investors to make it worth putting into an ASX company. The stock exchange might be short of media companies, but the sunset story of newspapers, even when profitable, is a tough sell.
It turns out that’s not the plan.
As Zoe Samios revealed today, the plan is to use Prime as a holding company for Catalano and Waislitz’s real estate interests. That includes Real Estate View, which is a distant competitor to Domain and News Corp’s REA Group. The article rules out ACM being part of the deal.
According to the report, Catalano “is expected to increase his stake in classifieds business Real Estate View to 72 per cent by the end of the week as he prepares to bring together a range of companies controlled by investment vehicle, IMP, and list them on the ASX by the end of this financial year”.
Catalano and Waislitz currently own 32% of Real Estate View, “along with 30 per cent of advertising group Tomorrow Agency/Media Plus and 25 per cent of The Today Business, which specialises in advertising services for developer and residential businesses”.
The board of Real Estate View is due to vote on the deal on Thursday.
It sounds like cash will not change hands for the big lift in Catalano’s stake. The increase from 32% to 72% will be in exchange for $75m of marketing sales and promotion. Presumably that will come from ACM.
That deal would suggest a valuation of Real Estate View of $187.5m.
Also part of the potential rolllup will be the Apartment Developments website and potentially a real estate tech play called Propic that Catalano also holds a stake in.
The paper quotes Catalano as saying: “The plan has always been to build a diverse multi-media real estate, digital and agent services business. The way I see it the total transactional value of real estate in Australia is in excess of $250 billion annually.”
It may have always been a plan, but it’s only two-and-a-half years since he flatly denied it, telling Mumbrella: “Why would I have my own real estate play when I’ve got a clearly defined partnership which includes promotion with the Nine Network for the next three years?”
The three year deal will expire on June 30. It will be interesting to see what Domain’s share price does today.
The other interesting thing about Real Estate View is that it also owns view.com.au, which offers the potential to drive into other classified verticals such as cars or jobs.
REA and Domain have such lengthy incumbency that it had seemed reasonable to assume they could not be dislodged. In the two decades since classifieds started to move online, there are few examples where a player late to the game can break in.
But Catalano brings both domain expertise and deep relationships with the people who makes decisions about where the property ad dollars are spent. He also pulled off such a move once before when he snatched Fairfax’s real estate print ads into The Weekly Review.
And one other thing to consider. As I mentioned last week, one of the factors that made the shell of Prime seem interesting is its $90m in carried forward tax losses. To use them to pay less tax on profits going forward, the tax office would need to be persuaded the company is still operating as the same or a similar business. The transition from regional TV affiliate to real estate platform may be a stretch. That could reduce the value of the Prime shell company.
What all this means for ACM is also unclear. There’s not much evidence that Catalano owns the company because of his love of local newspaper journalism. He seems to genuinely enjoy the company of journalists but I’m not sure he’s passionate about journalism.
ACM was a useful monopoly piece to hold when Catalano was thinking of becoming a multi-media regional player, before doing the deal to sell the TV stations to Seven instead. And it’s potentially a useful voice as a real estate advertising outlet.
But it’s hard to see ACM as a priority in Catalano’s thinking if the listed real estate play gets off the ground.
I could see the newspapers becoming an unloved cash cow, to be milked for as long as possible, but unlikely to be a priority for investment or strategic thinking.
The end of Business Insider Australia
Speaking of Zoe Samios, she also breaks a second piece of news in The SMH and The Age today, from within the company’s own stable. Business Insider Australia is to close.
I’m not entirely surprised. Local players being involved in franchises of international digital brands hasn’t worked particularly well.
Nine’s short partnership in the Daily Mail joint venture was an unhappy marriage. Fairfax’s partnership in Huffington Post was much the same.
Business Insider was inherited by Nine as part of the Chris Janz-founded Allure digital business which came via the Fairfax merger.
The Allure business model was to sprinkle a little local content onto the international brand and then monetise the local eyeballs. That included the likes of Gawker, Defamer and Gizmodo back in the day.
There’s an argument Business Insider was in the wrong local home. Independent, it might have been a greater competitor for Nine’s newspapers including the Australian Financial Review and the business sections of The Age and the SMH.
And then there’s the example of Business Spectator, the brainchild of Alan Kohler. Once it was acquired by News Corp in 2012 and folded into The Australian’s embrace, it quickly died.
I wonder if the demise of Business Insider Australia means there’s a gap for another online business title to become a credible challenger to the Nine and News Corp titles.
Newsfeed
Spotify
Spotify’s image problem is threatening to become a commercial problem for the platform too.
After the exit of rocker Neil Young from Spotify over the platform’s promotion of occasional Covid conspiracy theorist Joe Rogan, E Street Band guitarist Nils Lofgren and musician Joni Mitchell followed suit over the weekend. More musicians and podcasters are expected to follow.
TV numbers
The last few days of the Australian Open has delivered some big numbers for Nine, including an impressive metro audience of 3.074m for Ash Barty’s victory over Danielle Collins on Saturday. That number rose to 3.577m taking in regional viewing too, and peaked at 4.261m.
The all-Australian men’s doubles wasn’t far behind, peaking at 3.154m nationally.
Those numbers are unlikely to be beaten again this year.
With ratings for last night’s men’s final between Rafael Nadal and Daniil Medvedev folded into the new ratings week now underway, Nine still easily won the January 23 to 29 ratings week.
According to OzTam data compiled by Nine, the network won every night last week, in total people and in every key advertising demographic.
Nine’s tennis programming occupied nine of the top ten most viewed shows of the week.
Dr Spin: Struggles with statistics
Dr Spin writes:
Statistics are not for everybody. And that includes The Australian’s social media team, who last night made a valiant, but sadly doomed, attempt to illustrate the results of its latest Newspoll survey.
The bad news for Prime Minister Scott Morrison is that voters appear to be nearing the point where more would choose Labor’s Anthony Albanese as preferred prime minister.
The bad news for statisticians is that The Oz’s social media team decided the best tool to use was a pie chart, even while excluding the sizeable chunk of people surveyed who remain uncommitted. It’s fair to say that 43% rarely takes up more than half of the pie.
Should they have persisted with the idea of showing only the two numbers in the pie chart, Dr Spin’s two-minute take, built on Infogram, suggests the chart should look rather more like this:
Closer than The Oz makes it look, isn’t it?
And including the 16% who remain uncommitted, the pie chart actually looks more like this:
Luckily, most of Australian Twitter were up late watching the tennis, so were happy to pile in with helpful feedback while they were still awake.
As always, I’d love to hear your comments.
Time to let you get on with your Monday.
I’ll be jumping on a Japan Airlines flight back to Australia in a few hours. It would appear from the inflight guide that my entertainment choice consists of the original Ghostbusters or the original Matrix movie, along with the fast & Furious back catalogue. So much for my cunning plan to avoid the cinema for the last couple of months so I’d have something to watch on the plane.
Assuming I find some wifi along the way, the next edition of Unmade will be on Wednesday.
Have a great day.
Toodlepip…
Tim Burrowes
letters@unmade.media
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