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Smart move by HT&E due to compete clause. If another network snapped it up there could be a music war.
I thought that that was what was most likely to happen.
4KQ was an example that an AM music station can top or be near the top of the ratings.
This is a commercial transaction. Emotions and being nostalgic about days of yore don't play into a commercial transaction.
The station was sold and the new owners can use this station in any way that it finds fit. Acquiring 4KQ is to add to a network of sport/talk stations.
Irrespective of the change in format, I cannot understand how SEN can make a profit given SEN stations are low in its ratings and cumes for its respective AM and DAB+ services as reported in the ratings for capital cities.
Paying $12 million for 4KQ and amortising the price paid with expenses against the revenues to arrive at a profit will be interesting.
But I'm not privy to such detailed financial information.
In the end, it is a commercial transaction and emotions and nostalgia don't play.
Thank you,
Anthony, how important are ratings to maximise profits, Belfield in the land of the Wangal and Darug peoples of the Eora Nation.
This is sad news. I was hoping that NE might buy 4KQ, convert it to FM and flip the format and name to Smooth.
Oh well, guess I'll keep dreaming.
How can SEN make a profit? They had a profit of 3 million last year EBITA and after interest, tax and amortisation it was still 2 million. Revenue was over 73 million last year! (2020-21 fin year)
Because the people who listen all day long are very small in number and a niche audience. The people who listen during a sporting event though would be huge, and not all the live sport SEN covers is in daylight hours, and a lot of it would be when ratings aren't monitored.
I'm sure SEN knows through it's app audiences and audience engagement how many listeners they are likely to have.
Dear "jjcoolaus",
Thank you for a partial insight into the SEN's financials.
The $2 million dollar profit by SEN for 30 outlets is quite low compared to Macquarie Media's profit at $16.8 million for four radio stations, 2GB, 3AW, 4BC and 6PR, source https://finance.nine.com.au/business-news/2gb-and-3aw-owner-posts-profit-growth/ed227767-d1c1-4158-b4f2-46851e099fce .
For a return on profit over revenues of 2/73*100 = 2.74%, one can still ask whether $12 million for the acquisition of 4KQ and amortised over time, will be profitable in the Brisbane market alone rather than "mixed" with the other outlets. That is subject to the accounting standards and corporations law (ASIC).
At the same time if SEN does not rely on ratings alone but on other audience metric methods such as app data (I've mentioned the valuable data stream obtained from apps and smart radios on this site before) such information could well be a valuable guide to the sales department in order to charge more for advertising.
Nevertheless, you still have to ask the question that for a vast network of outlets whether a 2.74% return on revenue is good and whether higher returns can be achieved.
Thank you,
Anthony, of the business side of radio and financial management is an interesting topic, Belfield in the land of the Wangal and Darug Peoples of the Eora Nation.