Melbourne licence auction SOLD TO DMG for $52 million

The auction of the last commercial analog FM licence for at least five years took place in the Collins and Bourke Room at Le Meridian at Rialto Hotel Melbourne, where the licence was sold to DMG for $52 million. This is how radioinfo covered the auction live.

Two tv crews are there at the moment and our reporters say the bright room is now full with about 70 people.

radioinfo will bring you the bids as they happen. Click your ‘Refresh/Reload’ button every minute or so when the auction begins to see the latest updates of this story.

Kingsley Hall and Cathy O’Conner are representing DMG at the auction while Paul Thompson is on holidays. Local Nova manager, Fiona Cameron, is also with the large DMG contingent.

Other registered bidders include Macquarie Radio Network, Virgin and RG Capital Radio, but, as in past auctions, not all registered bidders might show up.

Austereo’s Dave Smith, who is not bidding, was also spotted in the room. “I’ve brought my visa card,” he told our reporters. Also spotted in the crowd is Clarke Sinclair.

Jonquil Ritter is now beginning the proceedings.

Apart from the DMG crew, most bidders are using lawyers or accountants who will not identify themselves.

Acting ABA Chair, Lynne Maddock is speaking.

“This is the last licence… we at the ABA have made the decision that no new FM commercial licences will be auctioned after today… Good luck to all bidders.

Auctioneer from Dominion auctioneers is about to begin.

1 mill

2 mill

5 mill

DMG 6 mill

10 mill

12 mill DMG

15

20

22 DMG

pause

25 mill

3 bidders in the play

26 once

30 mill against DMG

DMG 31 mill, once, twice

34 mill

DMG 35 mill

40 against DMG

41 mill DMG once

45 mill

DMG 47 mill once

48 mill

48,500 new bidder

49 mill

49 and a half

51 million

general buzz around room

52 mill to DMG

once, twice

SOLD to DMG

Unsuccessful bidders leaving the room.

DMG group lots of smiles

It is believed the under bidder, a gentleman with grey hair in his 50s dressed in a business suit (but not Ian Grace), was from Virgin. He did not identify himself to reporters in the room.

FIONA CAMERON: “It’s very exciting, when we compete for another licence I guess it will be for a digital licence in future…


Question to Fiona Cameron, How far were you prepared to go?

“You’ll never know!”

ARN representative: “It’s going to make the market very interesting.”

Paul Thompson is on the Ghan but has been following the proceedings by mobile phone from the auction room.

Groups are forming around the room with DMG chatting to Austereo people. Dean Buchanan and Dan Bradley are chatting to their DMG crew.

Dan Bradley: “Too early to think of too much… the station will be co-sited with Nova and will share resources to get the advantage of economies of scale… we will get Adelaide and Brisbane on line before working on this, then we will think about Sydney and Melbourne.

Adelaide will be on air before the end of the year.”

Media conference Kingsley Hall:

“It’s less than we paid a few years ago. We thought it would cost a bit more actually…”

“We have 12 months from today to get things happening…

“Running 2 stations in a shared building will give us some advantages…”

“We now have 67 stations, 59 regional and 8 metropolitan”

I don’t know who the other bidder was, but they forced us up… it’s still a lot of money eventhough its less than we paid in Brisbane recently.”

In Brisbane, we paid $80 mill to complete the Nova network. This licence will be part of our second group.

The Melbourne market is worth $130 to 140 million in annual revenue, which is less than the Sydney market, which is worth about $200 mill. There is the opportunity to earn more in Sydney so, obviously, the Sydney price was higher.

QUESTION: Will you sell your regional network?

Today is more about the metro network, we’re not in a position to say what we might do in six months, 12 months or two years time, who knows. Today is about Melbourne and our Metro network…

PAUL THOMPSON HAS RUNG RADIOINFO FROM ALICE SPRING WHERE HE IS WAITING FOR THE GHAN TO MOVE AGAIN AFTER A LUNCH STOP.

HE TELLS US:


I’m looking at the McDonald Ranges monitoring a radio auction in Melbourne – it’s very surreal, and very satisfying given our successful bid.

RADIOINFO: Are you going to sell the regionals now that you have two networks?

This has nothing to do with the regionals. They have no relationship to this auction.

This is the completion of the cycle and we are very pleased. We will be able to put this new station together with our Sydney station in a range of ways – especially sales. We will run a duo of stations in harmony to offer advertisers a two station opportunity.

It will give us a chance to offer advertisers an absolutely discreet market, different from the Nova audience.

Whilst some overlap is possible, we will try to avoid it, we will minimise it.

RADIOINFO: Does that mean the stations will target over 40s?

That means it will probably be within the range of 40 plus, yes, because Nova is strong up to 40s.

[Noise of platform call as train is departing]
Thanks for covering it radioinfo. I’ve got to go now!

Speaking to radioinfo from his Melbourne office, Austereo Chairman, Peter Harvie, has told us:


$52 million was a logical outcome. DMG would want to obtain this licence.

Thanks to radioinfo’s team of reporters at the auction: Jim Barbour (pictures), Simon Kirby and Tim Francis.