Southern Cross Media will sell Nambour stations once merger goes ahead

Southern Cross Media has cleared another hurdle in its bid to take over Austereo by giving formal undertakings to regulator ACMA that it will divest itself of Sea FM and Mix FM in the Queensland Sunshine Coast region once the merger deal goes through. The two stations are in the Nambour licence area, which overlaps with Brisbane, potentially giving the merged company control of 4 stations in the one combined area after gaining control of B105 and Triple M Brisbane. To own 4 stations in one area would breach the Act.

 
To solve the problem, the Australian Communications and Media Authority has given “prior approval” for “temporary breaches of the control and directorship limits” set by the Broadcasting Act. In return ACMA has accepted an enforceable undertaking from Southern Cross Media and its related companies to divest the two commercial radio licences in the Nambour RA1 licence area within one year.

The undertaking was offered to ACMA by Southern Cross Media in support of an application it made on 1st February seeking approval for the merger.

 

“The ACMA is satisfied that the enforceable undertaking offered by SCMG will be sufficient to ensure, as required by the Act, that necessary actions will be taken to remedy the relevant breaches within the appropriate time,” says ACMA Chairman Chris Chapman.
 

The breaches arise because section 54 of the Broadcasting Services Act provides that “a person must not be in a position to exercise control of more than two commercial radio licences in a licence area.” Related restrictions also apply to directorships under section 56, a clause that recently caught out Lachlan Murdoch for a short time when he gained a half share in DMG, as well as having a directorship in Prime Media Group.

Under the Act, the overlapping Brisbane and Nambour commercial radio broadcasting licence areas are treated as a single licence area for the purposes of sections 54 and 56 because more than 30% of the Nambour RA1 licence area population is attributable to an area that overlaps with the Brisbane RA1 licence area.
 

The situation is not unusual, ACMA has given prior approval for short term breaches related to mergers in the past. When Macquarie Media Group merged with Southern Cross Broadcasting some years ago, a similar situation arose and was handled successfully within the time frame set by ACMA.