Yet once those situations are resolved, the path could – theoretically at least – be clear for a more transformative media transaction. One that would create two major media companies in Australia with more coherent and politically consistent portfolios of assets.
The idea of a straight asset swap, in which Lachlan Murdoch’s Illyria personal holding company would transfer its interests in the Nova FM radio stations to Nine, in exchange for Nine’s ownership of AM radio stations such as Jones and Hadley’s 2GB in Sydney and Mitchell’s 3AW in Melbourne, is being openly talked about in media industry circles.
It has also been informally discussed by some senior News Corp executives, well placed media industry sources say. But that is a long way from a deal actually happening.
There could also be regulatory obstacles to such a transaction, of course.
One could argue that AM radio is better placed to withstand digital disruption than FM radio. It is far more personality driven, listeners are much older and less likely to be tempted to shift to on-demand music listening services such as Spotify or podcasts.
Then again, the people who listen to AM radio are aging and it is far from certain that demographics below them will necessarily shift to the medium as they themselves grow older.
Another question worth asking: would News Corp co-chairman Lachlan Murdoch (and his top lieutenant Siobhan McKenna) be willing to sell the asset which has been his greatest corporate triumph? That one that is harder to answer, but everyone has their price.
Through his Illyria investment vehicle, Lachlan owns Adelaide radio station FiveAA. Adelaide is the only major city where Macquarie Media has no presence so uniting these stations could have benefits.
According to last year’s annual report, Macquarie Media posted an underlying net profit, after tax, of $21.5 million. Revenue, meanwhile, was $136.3 million, up 4 per cent from a year earlier.
Meanwhile, Nova hasn’t filed accounts for 2018 with the corporate regulator. In 2017, it posted a net profit of $29.4 million on revenue of $204.3 million. It generates a significant income stream for Lachlan Murdoch, but he is also rich enough to effectively fold it into the family company, News Corp.
Nine owns 54.5 per cent of Macquarie Media following last year’s Fairfax deal. The remaining shares in the company are mostly held by advertising mogul John Singleton (who has been close to Jones over the years) and corporate adviser Mark Carnegie.
Singleton has made it clear he is keen to sell. Nine also signalled it was keen to move to full ownership of Macquarie Media, but not at current prices. Its shareholders don’t seem particularly keen on any deal in the current climate either.
In any event, Jones and Hadley are much more naturally aligned with the News Corp world view than that of newspapers such as The Sydney Morning Herald, The Age and even The Australian Financial Review.
In fact, Jones is already a regular columnist for News Corp’s The Australian broadsheet, while Hadley writes for the Daily Telegraph.
On the other hand, there is a degree of overlap between Nine’s metro TV news audiences and the two radio presenters. And while newspapers have been the strongest performing segment of the enlarged Nine, the nightly news remains a bigger priority for senior management.
One of the drivers of the Nine and Fairfax tie-up was a merger of the TV and radio newsrooms. Owning Nova would cement Nine as an entertainment powerhouse, but it could also diminish its clout in news and current affairs for mainstream audiences. “Married at First Sight‘s come and go but audience demand for news is constant,” said one media executive. “I know which I’d be betting on”.
John McDuling is a business, media and technology writer for The Sydney Morning Herald and The Age.