Which Radio Network would Seven buy?

Comment from Peter Saxon

Following the announcement that the Seven Network had secured the rights for the next two summer and one winter Olympics, Seven West Media chairman Kerry Stokes intimated to Fairfax Media that it is possible the multi-platform company could own a radio network too. But which one?

As is usual, the IOC granted one set of all-encompassing rights for all of Australia to one major media outlet to cover FTA television, pay television, radio, digital, mobile and Hybrid Broadcast Broadband TV, allowing the rights holder to on-sell their rights to other media not under their control.

The one platform where Seven does not have a significant presence is radio. So it makes sense for them to expand in that direction. The only fly in the current ointment is that the “two out of three” rule would preclude them owning a radio station in Perth where they already own a TV station and a newspaper. Still, even without Perth, the deal would make sense and there’s a solid chance that the government will scrap that rule in the near future.

As luck would have it for Mr Stokes, should he be in a buying mood, there’s at least two networks that could be amenable to a merger or takeover from the hugely successful Seven.

Southern Cross Austereo is already known to be speaking to Nine about a partnership while burdened with a mountain of debt following a couple of horror years marked by controversy leading to lost sales on the radio side and poor programming from the TEN Network on the television side.

Then, of course, there’s Fairfax Radio whose parent turned down a reported $200 million for the network a year ago while some estimates value it at half that today.

Both networks are financially stressed, which always attracts potential buyers looking for a bargain. Fairfax Radio would offer the cheaper alternative while SCA is a premium asset with two stations in each metro market and a swag of regionals. The Triple M stream is better suited to sport. Fairfax is also well suited to sport, but to an older demographic.

SCAs TEN affiliates could be sold off.

Of course, the purchase of a whole radio network is difficult to justify as merely an outlet for the next three Olympic Games which will take up all of six weeks, plus promos, over a whole decade.

However, in this age of aggregation the size of one’s bundle will have a major impact on the size of one’s profit. Whichever radio network Seven decides to buy it will be because it is a valuable asset that will help secure their future, not because it’s cheap.

Tags: |