Arguably this could sit under a number of threads, so I just selected Random. Some stray thoughts on the ARN takeover of Grant Broadcasters.
Grant’s continuing to own Geelong and JVs
Given the speed of the deal, I reckon this will be temporary and Grants will have disposed the remaining radio stations and JVs within a year. Clearly ARN and Grants weren’t going to open negotiations with JV parties until they sealed their deal. That means there is probably frantic negotiations already underway…some thoughts on that below.
I think Grants will have the two licences per market condition imposed on them, but as it was only HT&E (ARN) that was reporting to the ASX, only the ARN side of approaching ACMA has been identified. I am guessing the premise of the deal was that it was up to each side to sort its legacy conflicts. Grants will presumably be asking for resolution periods similar to what ARN will seek for 4KQ.
The Canberra/Gippsland potential deal
I think someone has already flagged the potential return to 2CC/MIX and 2CA/Hit104 duopolies owned by ARN and SCA respectively. Assuming SCA want to play ball, then removing Capital from the equation would be achieved by SCA selling 3SEA (known this week as Triple M Gippsland) to Capital in exchange for its interest in 2CA and 2CC. If SCA don’t want to play ball and Capital don’t have the cash, then Grant’s backup is probably selling its share to SEN so that Capital and SEN have a station each. Unleash Hutchy on Canberra!
The Tassie overlap
Given the limited profits in Northern Tasmania, I suspect the “solution”
is a combination of redefining licence areas (as undertaken by ACE/3TR prior to FM supplementary licences being issued) and combining licence areas (similar to 5AU/5CS). There is unlikely to be significant objection in licence areas that are marginally profitable at best.
The Geelong/Perth/Brisbane potential deal
Given the very limited potential owners of 3BAY/3CAT, the first step I expect will be a swap of Capital’s 50% share in 6iX for Bay-FM/K-Rock with a possible cash adjustment. This means that ARN/Grants will now to be able to undertake swap arrangements covering Perth and Brisbane. Basically, Nova takes 100% of 6PER and ARN takes 100% of 4BFM with 4KQ sold to the highest bidder of Nova or SEN. As others have commented 6iX would become part of the Pure Gold network. I suspect if Nova acquired 4KQ, its format would remain relatively unchanged.
The Turning Point
I think the big take-away is that this is an indicator of the rapid decline in viability of the radio industry, which has clearly been exacerbated by COVID-19. A long term successful player like the Cameron’s don’t walk away on a whim. The continuous vicious circle of cutting costs through networking is damaging the appeal to listeners and hence advertisers, resulting in yet more cost cutting. By removing local content, the differential between commercial radio and other options like spotify diminishes…etc etc…
Expect further consolidation
As the number of radio operators dwindles, I expect the lobbying efforts of commercial radio to focus on permitting 3 licences per operator in metro markets and removal of radio from the 5 voices test. This would then result in yet a further round of consolidation, networking and decreased listenership.