ARN acquisition of Southern Cross Austereo (pending approval)

[Parex11]

Jennifer Anniston - Reece Witherspooon, Apple TV Plus presents Radio Wars! The story of two radio companies and their rivalries being put aside to form a profitable group!

[Radioistillluoveyou]

So that actually leaves it wide open for the smaller players to chase what is left over in each market, there will be overlaps. Cruise 1323 Adelaide could go to ACE for example

[lovemusic]

They’ll likely merge with the Pure Gold networks to have Hit/Gold together. They’ll have a big market share in Melbourne.

I read that ARN would take control of 88 regional stations and Anchorage would be left with a handful of metro and regional stations.

[TV.Cynic]

Speculation:

It could also mean SCA’s ambitious play for re-signing Kyle and Jackie O would be abandoned. If that was the case, it could mean that ARN doesn’t have to match the huge offer SCA made to secure the two KIIS 106.5 breakfast stars for a new contract period.

ARN joins private equity bid for SCA and its Hit and Triple M radio networks

[TelevisionAU]

@lovemusic

I read that ARN would take control of 88 regional stations and Anchorage would be left with a handful of metro and regional stations.

I think in the proposal Anchorage would get 35 regional radio stations (including 8 metros), plus SCA’s digital audio and television businesses.

[thesub1]

“Abandoned”? Does Kyle like that word being used?

From what I’ve read, ARN would only want the KIIS and Triple M networks (no mention of 2Day). So if SCA retains SCA, couldn’t/wouldn’t they then want K&J back?

Or are ARN’s sights more set on a larger network rather than putting all that money into one market/one breakfast duo?

From what it reads, it looks like the metro Hit Network would remain with SCA (probably as is). Which would be a good deal for SCA to have the top rating Fox & GOLD104.3 in the one market.

[Ant5476]

@thesub1

From what I’ve read, ARN would only want the KIIS and Triple M networks

Why is ARN interested in the Triple M network, which rates very poorly except for Brisbane and Adelaide. Their current Pure Gold stations rate higher and have higher cumulative audience than most Triple M’s.

Also is Anchorage looking long term to be in radio, or will they eventually sell of the stations they have acquired to Nova Entertainment, SRN, Capital Radio, SEN???

[webguy]

@Ant5476

Why is ARN interested in the Triple M network

Probably for the football rights and the benefits of having a large network. Despite low overall ratings, Triple M does quite well in it’s key demos and makes alright money.

@Ant5476

Also is Anchorage looking long term to be in radio

You wouldn’t think so. It’ll be like the Macquarie days again. These investment groups will hold onto the stations for a little while (maybe around 5 years) and will then be looking to sell at a profit.
No doubt the aim for TV would be to prepare these for sale to the networks, but I don’t know who would be a good buyer for radio. The market would be so consolidated that they’d be virtually no existing operators to sell too. Maybe they’d lobby the government to increase the 2 station rule, of even try to bring in an international operator.

[AustralianAerial]

@webguy

Having read the letter to the SCA board, it looks like ACP get the stations ARN don’t keep, which they’ve outlined as including 25 stations currently owned by SCA. I wonder why that number is so high?

Would divesting all of regional WA get you up to 25 stations? Could onsell back to Seven.

[MarkHD]

@thesub1

From what it reads, it looks like the metro Hit Network would remain with SCA (probably as is). Which would be a good deal for SCA to have the top rating Fox & GOLD104.3 in the one market

Nope. ARN and ACP will own all stations.

Under the proposed transaction radio and television assets of ARN and SCA would be separated and independently owned by ARN and ACP, subject to regulatory approval.

There would then be two separate, national media organisations able to compete independently of each other

[AustralianAerial]

Not what the proposal says.

(Edit: Sorry Mark, didn’t properly read what you were replying to; still, a fair bit of misinformation around this which is cleared up by the below paragraphs)

ARN will remain ASX-listed, and is expected to operate a network of 10 metro and 88 regional radio
stations, owning 100% of two stations in Canberra, plus its existing digital audio business; and

ACP is expected to own and operate a separate network of 8 metro and 35 regional radio stations, plus
SCA’s existing television and digital audio businesses.

ARN and ACP have partnered together exclusively with respect to this Indicative Proposal and are pursuing the Proposed Transaction on a joint basis. At completion of the Proposed Transaction, ARN and ACP will be independent of each other and will compete with each other in metro and regional radio and more broadly.

The way to conceptualise this is: ARN buys SCA, keeps the assets it wants from both companies and flogs off the rest to a friendly competitor.

[MarkHD]

@AustralianAerial

The way to conceptualise this is: ARN buys SCA, keeps the assets it wants from both companies and flogs off the rest to a friendly competitor.

Bingo.

All good mate - knew you were replying moreso to another poster.

[TelevisionAU]

@MarkHD

Nope. ARN and ACP will own all stations.

will ACP just become SCA in name, given it will largely buy the parts of SCA that ARN doesn’t want?

[utaussiefan]

I’d love to know what ARN actually see in SCA, there’s probably only one or two metro stations they’d probably want. ARN have a relatively strong metro station network already.

[Ant5476]

@utaussiefan

I’d love to know what ARN actually see in SCA, there’s probably only one or two metro stations they’d probably want. ARN have a relatively strong metro station network already.

I guess to expand their regional network, to take out a competitor, and to make sure there is no risk of them loosing KJO.

Does anyone think it will get past ACMA, and the ACCC?

[TVHead]

I hope it doesn’t, this is insanely anticompetitive.

[captaincupcake]

From a regional listener perspective, this can only be a good thing. There’s a lot of good talent on regional MMM but it’s the wrong branding and suffers from trying to be too many things at once.
If the regional M’s could rebrand, adopt something like a Pure Gold format music wise and drop the evening sports programs I think they could be on a winner.

[bacco007]

@TV.Cynic

I don’t know that such a concentration of control, if not ownership, is in the best interest of diversity in Australian radio.

I agree, but the ship set sail a long time ago and I’m not sure there is really an opportunity to get it to return to the dock. We should have used the shift to digital broadcasting (DVB-T + DAB+) to open up opportunities to new players, but that’s basically impossible when the fox lives in the henhouse.

All this deal seems to do is shuffle the deckchairs into two new piles

@Jeffmister

Will SCA accept this ARN/ACP proposal (that’s the key thing here - a deal hasn’t been done yet)?

If it remains the best deal possible and continues to offer over the list value then you’d have to think it’s likely - ARN/ACP will no doubt be working on institutional investors to get their support.

@Ant5476

Does anyone think it will get past ACMA, and the ACCC?

The deal seems to be engineered around an easier regulatory approval process - it will possibly trigger some change events though. Not sure whether the ACCC will be interested.

@TVHead

this is insanely anticompetitive.

Not sure I completely agree - on the basis that it meets the various voices tests, it pretty much only shuffles the pack into a new order.

[TVHead]

I’m sorry but it’s effectively a friendly deal between two operators which is much different than the current environment of two different companies. This is basically a shitty way of getting around the current laws but owning all the stations. It should be blocked.

[Ant5476]

I think it is time for a review of media laws, the two station rule is no longer applicable. If an operator could own 4 stations in a metro market this would be a simple sale, and the listeners would be rewarded with more diverse formats.