In what may become a neat piece of strategic timing (see other story about Steve Price), Macquarie Radio Network Limited (MRN) and Pacific Star Network Limited (PNW) have announced a potential partnership that may see the birth of a third talk station in Melbourne.
John Singleton’s Macquarie Radio Network and Pacific Star Network, owner of 3MP and SEN (formerly 3AK), announced they have “concluded a Heads of Agreement that contemplates the formation of a joint venture for the production and supply of radio programming in the Melbourne market.
“The Heads of Agreement is subject to satisfaction of customary conditions, including due diligence, the grant of any required regulatory approvals, and board approvals.”
Pacific Star Network has had many financial ups and downs in recent years, but recently stabilised its balance sheet and has been running a lean but apparently trouble-free operation in the past year. SEN and 3MP sit towards the bottom of the Melbourne ratings table, with SEN on 3.9% and 3MP on 3.4% in the most recent survey.
The Melbourne radio market has survived the financial crisis well, catching up to Sydney in total market revenue during this year. With only one commercial talk station dominating talk revenue in the Melbourne marketplace there is plenty of room for a rival talk network to slice a little off the 3AW juggernaught’s ratings and revenue to survive. SEN has already made some inroads in competitive sport programming which have cannibalised some of 3AW’s sport audience in the past year.
If the agreement goes ahead the strategic question for the joint venture company will be which station to kill, 3MP’s music format or SEN’s sports format? And of course Pacific Star now also owns digital radio channels which are not viable yet, but may provide an interesting program sharing long term game plan for the joint venture partners in both cities.
Both Neil Mitchell and Steve Price are believed to have been approached by the joint venture partners to sound out their willingness to jump ship if a new talk station gets up and running.