APN Chief Executive Officer Brendan Hopkins took a pot shot at the prices paid for commercial radio licences during the company’s annual results announcement.

“Shareholders should be asking questions about the amount some companies have paid for recent licences,” said Hopkins in his presentation.

He believes recent prices are “unsustainable” and says the company’s radio division ARN “will not be overbidding” on upcoming licences.

Analysing the recent DMG Adelaide licence purchase, Hopkins said: “The Adelaide market is worth about $46-47 million. With $24 million paid for the recent licence, logic tells you it will be difficult to make money.”

Comparing that price with the company’s recent purchase of 20 stations in New Zealand, Hopkins told radioinfo: “In New Zealand we have just paid something less than $10 million for 20 stations. We can make money on that.”

He explained that the New Zealand radio landscape is arranged in a cluster model similar to US radio markets, where companies can generate profits by operating several stations in the market. While APN has urged Australian regulators to adopt this model, he does not think there is any real likelihood of that outcome in the immediate future.

What does Hopkins think the Brisbane licence should sell for?

“The Brisbane radio advertising market is worth $65 million. If newcomers pay more for the new licence they will never make money,” he said.

And Sydney?

“$40 to $50 million would be profitable. If someone paid $155 million like the previous licence it would not be possible for them to make a profit.”

Hopkins indicated that the company is interested in new licences in locations such as Brisbane if the price is right, but said: “We don’t have to buy to grow.”