Of course I could turn out to be completely wrong, but in the medium-long term future I think the temptation to have a SEN station on both AM and DAB+ in Sydney will far outweigh any desire to continue operating a music station which these days only really rates well with the 65+ demographic despite numerous attempts to modernise the playlist in recent years. At the very least, it’d be surprising if SENTrack and some form of SEN main station didn’t eventually make it to Sydney DAB+.
Also for what it’s worth, the Twitter handle of the official 2CH Twitter account (which was previously @2ch1170) has changed to @sen1170 although the Classic Hits 2CH name/branding remains. Make of that what you will.
Yeah, I agree with both these points. As the current contracts with 2SM and 2UE expire, I’d probably expect to see (or more to the point, hear) all SEN/CrocMedia sports coverage move over to their own stations for the Sydney market.
If they want to just ditch the format - why not just go to Nine and make a deal to swap 2CH for 2UE? 2CH would give Nine the foot in the door for their music network, and if Nine took on the 2CH staff, SEN wouldn’t need to work out how to manage transitioning that team to a sport format.
They might also be concerned that the 2UE brand has value particularly as a talkback station and think a rival (not necessarily SEN) might one day relaunch 2UE as a talk station… that’d be harder to do with 2CH.
2UE is wholly owned by Nine Entertainment Corp, no association with 2CH. There is no ‘team’ to transition, 2CH literally has about 6 staff total. 2CH was owned by EON broadcasting which is 97% owned by Oceania Capital Partners who are equity buyers/investors. Whatever price 2CH was actually sold for in cash/shares, 97% goes to OCP, they did the deal as majority owners. Equity buyers buy low and sell for higher. That’s exactly what occurred here, a business transaction, formats are irrelevant.
SEN have purchased a music formatted station - there’s brand value for 2CH as a music station that’s worthless to them if they are trying to build a sports talk station. That name recognition and existing audience share could potentially be worth something to Nine.
It would be fascinating to know the back end of this deal. From memory, 2CH lost around two million dollars for each of the two years just prior to OCP’s last available Annual Report. To suggest that in the ensuing period, (say, the last 18 months), it has gone from being that far down the hole to turning a tidy profit is a bit of a stretch, (though I would happily be proven wrong on that one).
Ratings-wise, a share of three to four points that 2CH has rated since EON took charge, should not be celebrated as success, so I’m puzzled as to why transferring the current 2CH operation to 2UE would be seen as a good idea.
It would seem that OCP was sold a vision for 2CH that management has simply not been able to make a reality, and on top of that, someone knocks on the door and offer 11 million bucks and a share bundle for the licence. Equity buyer’s dream! I know everyone seems to be saying business as usual for 2CH, but long-term, that doesn’t really make sense, particularly for a company with the business model adopted by Pacific Star. It will be interesting to see how they wrangle the Council of Churches. If they stumped up 11 million bucks they must have a strategy to address this one well and truly in place.
OCP/EON purchased 2CH at a price far lower than market value because MRN stuffed around for so long that it basically turned into a fire sale.
There’s also more to the valuation than the profit/loss being made. These figures can be skewed by creative accountants and/or usual events outside the ordinary course of business. Numbers other than the bottom line are also relevant, and for PNW the value is also based on what they think they can do with the station.
