ARN acquisition of Southern Cross Austereo (pending approval)

Why would a national hit network brand be blown up for Gold? Will never happen.

Why have 3 CHR stations in Brisbane, Perth and Adelaide out of 4 stations?


And realistically, is the Hit Network brand even worth keeping? Always felt it was a weak brand


It didn’t used to be. It pretty much went downhill after Southern Cross took over Austereo in 2012. It was the #1 network nationwide for a long time. It’s really only since K&J left (and they brought in the Hit branding - Hit107 Adelaide, Hit105 Brisbane) that it all went pear shaped. As I said, it’s Southern Cross’s fault.

If Austereo was still in charge, and only had the stations in Sydney, Melbourne, Brisbane, Adelaide, Perth, Newcastle, Canberra (maybe chuck in Gold Coast and Hobart), I think they would’ve been okay.
They got too big and tried to cater to too many different audiences, and it doesn’t work.


DAB makes including only analogue, irrelevant. There’s plenty of classic rock and 80s, classic hits stations on DAB.

The Hit network does well outside of Sydney but even in Sydney its rating a 5 share which is the highest it’s been since K&JO defected to ARN.

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What is ACM offering for SCA shareholders?

Remember that the current entity had an IPO of $4.75 for just the regionals post DMG acquisition by Macquarie Bank.

There has been a huge squandering of value of once blue chip metro assets.


From AFR

While the details are unclear, sources close to Southern Cross said the letter was sent by Catalano, and his business partner in ACM, Alex Waislitz, on Thursday. The missive is believed to propose selling part of ACM into Southern Cross in return for scrip in the target


Channel 7 just swooped on 20% of ARN.

Source: SWM ASX: Kerry Stokes’ Seven swoops for big ARN stake as radio wars escalate


20% seems potentially an issue, surely there are some markets where the ex-Grant stations being owned at the same time as the Seven station would breach the voices rule?


That is correct. The markets that would have that issue include Nowra, Bega, Muswellbrook, Ipswich, Bundaberg, Rockhampton, Mackay & Murray Bridge. And yes, even Katoomba, where ARN owns CADA 96.1, would have that issue as well, as Katoomba RA1 currently has 4 voices (ARN, Seven, Nine & Ten).

Plus, if the ARN/SCA merger doesn’t go ahead, and ACM instead acquires SCA, then ACM, on top of selling their daily newspapers in Burnie & Launceston, would either have to sell their daily newspapers in Wollongong, Bendigo & Wagga Wagga, or ARN sells Wave FM in Wollongong & Gold Central Victoria, plus SCA selling their Bendigo & Wagga Wagga radio stations.


This is getting spicy.


Wonder if they know more then us… Is the voice rule is changing :person_shrugging:t2:

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I just think we’re going to see our weak regulator pushed to the limit with the amount of breaches we’ll see in this period of ownership turmoil, nothing actually changing legislatively but just accepting the miniscule punishments dished out.

The voices rule is interesting, in one sense you have unlimited voices from the internet, but almost no local content, so the point of the voices is to have multiple sources of information local to the market - but it’s pretty out of date already with how utterly irrelevant newspapers are, as well as how much “local content” on TV is just regurgitating press releases with so little funding for original reporting.

The lack of actual news content means the “voices” that we seek a diversity of end up having nothing to say.

I don’t think we fix that by just removing the rule though, it’s one of the rules that makes the most sense in concept - even if the result in the real world doesn’t bring much actual unique content sources.


If anything, the voices rule actually hurts local media these days as it penalises owning a newspaper when you have other media interests.
I can understand TV and radio as there is only a very finite amount of spectrum available. There’s no such issue with newspapers (you can start as many newspapers as you want without interfering with someone else’s ability to publish a newspaper) aside from commercial viability which is a completely different matter.
I can see this being another Catalano front page special campaign though- “Save Our Voice- Your Local Paper in Peril”.

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I think ACM being folded into SCA with Catalano having a larger stake in SCA is much more desirable than the bizarre ARN and private equity play for SCA.


There’s no market where it would change the math though. In a typical two radio station, three TV station market, the newspaper owner can own either both radio or a TV station, while if the newspaper doesn’t exist, you can still only own the two radio stations or a TV station - radio+TV and radio+tv+newspaper is the same number of unique voices.

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Surely you could change the voice setup to three voices but they can’t all be the same technology ie newspaper, radio or TV.

I wonder if a SWM/ARN deal would be enough to avoid them chasing SCA?

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Doubt it. AFR article linked above says they support the proposal so they’d want in on a slice of the end result not just ARN as it is now.


Absolutely ridiculous state of affairs if so.

The only positive is that a combined SWM/ARN/SCA would have to sell off a whole swag of assets in Western Australia - perhaps finally decoupling Seven and The West?

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Turns out that SCA confirmed on Friday what the ACM offer was in a release to the ASX

It was “unsolicited” and does involve SCA acquiring ACM in return for new SCA shares as outlined in the AFR article from last week. The AFR today reports it would be in the order of sub 20%. The deal excludes ACMs agricultural assets and their real estate platform

SCA is also recommending shareholders take “no action” on any if the proposals while they are assessed

The AFR report suggests that Seven will be ARNs largest shareholder, with News Corp retaining their 13% stake. Seven have secured 14.9% stock and the remainder as an equity swap with Barrenjoey