Even master illusionist, David Copperfield, would find it difficult to make his magic work on radio. Yet, erstwhile chairman of what was once RG Capital, and now Executive Chairman of Macquarie Bank’s media fund, Tim Hughes, has pulled off a Houdini act that has stunned the media sector. And, like any good magic trick, it was already done way before the punters had any inkling of what was happening.
In an exclusive interview with radioinfo, Tim Hughes tells us that dmg’s regional network was being courted almost as soon as the RG Capital deal was on the table late last year.
“About November last year”, says Hughes, “the story was with RG Capital, which was a listed company, that we had taken it to a level where we couldn’t take it much further in terms of both growth and acquisitions and either RG Capital had to put up a lot more capital to take it to the next stage or it was in the interest of staff and management to divest it to someone who had that capital.
“Coincidentally, I was approached by Macquarie Bank to set up a media fund. As you know, they have infrastructure funds in airports telecommunications and freeways and the bank thought that media, particularly regional media, would be a good place to invest their capital. So, they pressed me to set this fund up back in about November. And, RG Capital agreed to divest their stations. And, around the same time, we approached the Daily Mail Group.”
radioinfo: What benefits will this new merged network bring to investors?
Hughes: We’ll now be in a position to invest in programs and sales promotions right across Australia and no one’s been in a position to do that before. I might add that in regional markets radio is very local and it’s our intent stay live and local like we are.
radioinfo: What are the benefits to the listeners?
Hughes: As part of a bigger group it has got more resources to deliver local programming. It’ll have resources in terms of national and local news. And I think we’ll be able to compete more effectively with other forms of media.
radioinfo: Will more or less of your programming be networked?
Hughes: I don’t have any feeling on that at the moment – we will review. But look at my background. My background with RG Capital has been that in the majority of cases we have been live and local. We have announcers in all of our stations in the markets where we transmit from – which is a natural thing when you look at our revenue – 75% of it comes from local sales. Radio is the local medium in regional markets, so you can take a guide from that.
radioinfo: What affect will the network have on job opportunities?
Hughes: RG Capital Radio, which really commenced in 1989 when our syndicate got the first FM in regional Australia, started with a staff of about 45 or 50 people on the Gold Coast. When it was divested last month it had a staff of 400. Now we have a staff of 1100. So it’s growing and growing, not shrinking.
Hughes is clearly pleased with the outcome of his carefully crafted deal: ”It’s great to see dmg go back into Australian hands. Macquarie Bank is an Australian company and to see capital being committed to Australian media is fantastic – particularly regional media,” he said.