Macquarie can get a lot better before float: Max Donnelly

Max Donnelly has just been appointed full time executive chairman of John Singleton’s 2GB and 2CH, with a mission to get the two Macquarie Radio Network stations ready for a public float in the middle of next year.

Donnelly, an accountant already on the Macquarie Radio board, is a mate of Singleton’s, who was co-opted into his new job just two days ago. His aim is to increase the station’s profit (currently about $10 million) to a higher level before the planned float.

He told radioinfo about how he plans to tackle his new job:

radioinfo: How did Singo approach you to do this job?

Donnelly: He called me on Monday and said, ‘Max I need your help to convince a bloke to do the job for me.’ Sure. I said, who is it? ‘It’s you,’ he said.

radioinfo: In the past when radioinfo has interviewed John Singleton, he has declined to reveal detailed profit figures for the stations because they are privately owned. I guess he’ll have to reveal them now.

Donnelly: Yes, that will be part of my job, getting the accounts ready for a public float.

radioinfo: How much is the Macquarie Radio Network worth?

Donnelly: You’ll have to ask the analysts that. They would do a calculation based on EBIT, growth and a multiplier.

radioinfo: What are you planning to do to get the company ready for the float?

Donnelly: John pays me, not the Macquarie Radio Network. My job for him is to get the company in the best shape for a float. In runs reasonably now, but it could be a lot better.

In some cases, we are spending $2 to make $1, we need to fix this.

We need to look at the pricing structure of our advertisements, especially in the Jones and Hadley shows. Why would you discount ads in these programs when the inventory is full? Someone fresh can look at things like this and ask questions with a view to improvements.

radioinfo: Has anything changed with Angela Clarke’s role now that you are on board full time?

Donnelly: No. Obviously Angela Clarke is still the CEO, running the business. I’m not running programming or sales on a daily basis. I think the station’s well-run, it gets listeners and results.

radioinfo: So what will you be doing?

Donnelly: Looking at strategies. Ideas such as selling more between midnight and dawn for instance. No discounting except for volume. Pricing structure and staff commissions. This is not an insolvency case, this is about maximising profits into the future.

radioinfo: Announcers clearly bring in lots of revenue, but what about other areas like the newsroom for instance. In the past, Singo has gone on the record saying that newsrooms cost money but don’t make money. Are you thinking along those lines?

Donnelly: No. News-talk radio without a newsroom doesn’t make sense. I won’t be cutting costs if it reduces our capacity to do what we do.

radioinfo: How long will that take?

Donnelly: I’ve given myself three months to do the job, but in fact I hope to finish it by Christmas. Once my job is complete, I will hand it over to others to prepare the paperwork for an initial public offering. That process can take some time, so John’s timescale of the middle of next year seems realistic.

radioinfo: Will John Singleton sell out of Macquarie Radio all together or will he retain some control?

Donnelly: With the escrow period, he will be locked in for a statutory time period. He has told me it’s not a means of getting out of the business, it’s more about getting more money into the business to position it for future strategies.

radioinfo: Is this part of a strategy which anticipates changes to media laws after the government takes full control of the Senate mid next year?

Donnelly: I’m not sure. He hasn’t told me much about that and I’m an accountant so I’m not sure of the big picture at this stage. I’ll read up a bit more about the media laws on radioinfo and tell you more next time.

radioinfo: Do all these latest events mean that the Macquarie-Virgin partnership is officially dead?

Donnelly: I guess it’s dead, that’s what I’ve seen in the press. I’ve not heard anything about that one way or the other from John.

Singleton told staff about the plans yesterday by memo, a move which Donnelly says reflects Singleton’s belief that the staff had to be the first to know what was going on.

Max Donnelly

Max Donnelly is a partner at Ferrier Hodgson and is on leave from his duties there for this period of secondment to Macquarie Radio Network.

He has practised exclusively in the field of insolvency management and litigation support since 1978. He has undertaken numerous corporate appointments including receiverships, liquidations, provisional liquidations and Deeds of Company Arrangement since becoming a Liquidator in 1982.

He is well known for his work as the Trustee in Bankruptcy for Christopher Skase.

Donnelly’s most recent appointment was as the Liquidator of Australia’s largest manufacturer of shopping trolleys.