Foxtel chief executive Kim Williams has questioned Fairfax Media’s $520 million decision to buy Southern Cross’s radio stations and production house Southern Star.

Williams claims the price Fairfax paid was at “wild variance” with commercial valuations.

In an interview with The Australian, Fairfax CEO David Kirk highlighted the benefits of the merger – which included its takeover of 2UE, 3AW, 4BC and 6PR – and particularly the synergies between Fairfax’s expanded range of print, online and radio assets.

Mr Williams disagrees, telling the ABC’s Radio National, that Fairfax’s views on the synergies are flawed.

“Let’s just say that the synergies between radio, newspapers and the internet are not immediately apparent to me.”

“The only broadcasting organisation in Australia that has a true synergy of that kind is in the excellent podcasting service that the ABC provides for its various radio products.

“But let’s be frank: that’s niche. That has nothing to do with mainstream commerce of the sort that I assume Fairfax aims to do. The kind of price that is being paid seems to me to be at wild variance with the reality of the commerce of the matter.”

One media analyst said that Fairfax had paid a big price for the radio assets – given his estimates that Sydney’s 2UE is breaking even.

“Admitting they’ve paid 14 times operating earnings for the metropolitan radio businesses – in the knowledge that 2UE likely contributes almost nothing to it – supports the overpaying criticism.”