The merger always made commercial sense: MRN Chairman | radioinfo

The merger always made commercial sense: MRN Chairman

Wednesday 11 November, 2015

At Macquarie Radio Network's annual general meeting on ratings day ysterday, Chairman Russell Tate said the merger of Fairfax and Macquarie Radio "made sense."

The merged company recorded an annualised profit after the reverse takeover of $5 million, but the results are largely meaningless as do not offer much indication of the company's future performance.

With the merger now completed Fairfax Media Limited holds, 54.5% of the Company, and MRN shareholders as at April 1st, had their holding reduced to 45.5%. MRN’s largest single shareholder, John Singleton, owns 32%.

"We are off to a promising start, and at our current run rate Earnings Per Share already exceed what Macquarie Radio and Fairfax Radio could deliver operating separately before the merger. I remain very confident that we will continue to generate strong and sustainable earnings growth through the next 2 to 3 years," said Tate.

Looking to the future, Russell Tate said the company is "slightly ahead of budget targets after the first 4 months and remains confident of achieving full year earnings (EBITDA) in the range between $20 and $25 million." Cost synergies (savings) of about $15 million are expected now that the merger is complete.

On the revenue side Tate said progress is slower than expected, "but we continue to have success in attracting big new budgets with tailored, ideas driven, and network-wide proposals. To date we have added around $7 million in annualised new revenue in this way and we will continue this targeted approach over the next 6 months... we need to drive revenue growth and reduce churn in our current advertiser base and to that end have initiated a full review of the structure, practices and make-up of our sales force."

Increasing the recognition amongst marketers and agencies of the value of the 40-plus demographic "continues to be our biggest selling challenge," said Tate.

Keeping network ratings up will be an important part of increasing revenue, said Tate, who mentioned the newly restructured Magic network, the fact that the Jones and Hadley programs are now networked to Brisbane and a range of other new initiatives in programming. Referring to the trade-off between increasing ratings and networking shows to other markets for advertiser benefits, Tate said: "We will continue to broaden the geographic distribution of content where it meets the criteria of economic benefit (some of it is sponsor driven) and being ratings neutral at worst in all markets."

Forshadowing a new sponsored network program he said: "We will in the New Year be launching what we believe is the first ever broadly appealing, sponsor commissioned and funded, 1 hour program which will be broadcast weekly throughout our national network and also go to dozens of regional stations. Our news-talk format, particularly outside of peak zones, lends itself perfectly to the production and presentation of such programming and we are currently in discussion on several such projects."
 
A format change is also on the cards for 2UE: "The New Year will also see the announcement and launch of a new look 2UE. This is a major initiative for Macquarie Radio and again will be a first in Australian radio."

 

The company's AGM also formally ratified the proposed name change, so Macquarie radio Network will now be known as Macquarie Media Limited, signalling the potential for growth in the ross media and digital properties in future. The new name also comes with a new logo pictured above.

“MRN needs to keep evolving to capitalise on commercial opportunities in the media landscape and to fully realise the potential created by the merger. The name ‘Macquarie Media Limited’ sets our new ambition in a world where traditional media is only part of the puzzle whilst acknowledging the origins of our company,”  said Russell Tate.

“The merger of FRN and MRN has created a strong new business and the most significant News Talk radio company in Australia. Alongside this change, the media industry continues to evolve. Digital distribution channels mean that any legacy media business has the opportunity and requirement to innovate. Newspapers are no longer viable in print alone. Free to air television is being disrupted and the music industry was disrupted long ago. By contrast, radio has thrived on innovation. It has kept this industry vital from the invention of AM transmission and through to FM, DAB+ and the 21st century explosion online.”

The new logo features two interwoven letter Ms and incorporates the origins of each company with MRN’s corporate colour scheme of red and FRN’s blue. The company’s Australian Stock Exchange ticker code will remain ‘MRN’ and the name change is effective immediately.

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Eugene Delargy
11 November 2015 - 12:46pm
Tate: "Earnings Per Share already exceed what Macquarie Radio and Fairfax Radio could deliver operating separately before the merger"

Of course, because you have sacked so many staff. Content quality is down the toilet. Exactly the same way Fairfax have treated their newspapers.

Tate: "we need to… reduce churn in our current advertiser base…"

Oh really? Is that because many of your stations are below par and therefore do not return results for clients? Many of the clients I work with know themselves the pitfalls of putting money here and actively tell me no (I wouldn't anyway).

Would it be because now, there are many new clients who have never advertised on radio before and it would be more effective for them to advertise elsewhere but have been lured by big promises that don't eventuate?

The difference in profit, of course thanks to the inclusion of 3AW and to a lesser extent (borderline) of 6PR. All other remaining Fairfax radio assets are in a parlous state.

'…mentioned the newly restructured Magic network, the fact that the Jones and Hadley programs are now networked to Brisbane and a range of other new initiatives in programming. Referring to the trade-off between increasing ratings and networking shows to other markets for advertiser benefits, Tate said: "We will continue to broaden the geographic distribution of content where it meets the criteria of economic benefit (some of it is sponsor driven) and being ratings neutral at worst in all markets."'

Yes, the fact that Magic with rebranding in Brisbane and reformatting in Melbourne is about half what it once was. How is this successful?

Jones & Hadley & 12 hrs more Sydney content in Brisbane, it's not working for them and nor will it ever. Nowhere near the 4BC days of Macrossan St or the Big Mac era (David McDonald as GM, now head of Variety CC Qld).

I love Tate's comment of broadening the geographic distribution aka MORE NETWORKING. Less local, less relevant, less audience, less client results.

Another gem from Tate, 'ratings neutral at worst in all markets'. So this means, they don't care about ratings, they're not keen on investing heavily to get the best result; if it's cheap and rates ok, then great for them.

This whole article shows the short sighted thinking of what could be a most influential radio network but is sliding towards irrelevance.

Put it this way, Turnbull won't be rushing to the wireless the way Howard and Keating once did.
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