The $200m radio merger between Fairfax Media and Macquarie Radio Network could become reality in the near future, as Fairfax looks to increase its non-print activity.
The deal was first proposed in October last year and shut down by Macquarie Radio Networks John Singleton in late February. However talks about revisiting the deal have opened.
Under pressure Fairfax chief executive Greg Hywood received a rare upbeat rap last week, as Allan Gray, who owns a 5.7 per cent stake in Fairfax, praised him on his efforts, as Fairfax returned to the black with full-year net profits of $224m.
The media giant is under fire for paying executives $2.4m in bonuses this year for reaching financial targets – mostly acheived by sacking hundreds of staff.
In a leaked email, general counsel Gail Hambly justified the bonuses saying "the increases are all incentive based — ie the management was prepared to back itself to achieve set targets — something the journalists are refusing to do,’’
Hywood admitted to the Australian Financial Review that Fairfax radio had delivered a disappointing result. Its underlying earnings before interest tax, depreciation and amortisation fell 26 per cent to $13.9m on revenues 6 per cent lower at $104m.
Haywood said to AFR that the merger talks have been going on since October, following failed talks held two years previously, which had caused ‘instability’ within Fairfax’s radio business.
“People were not focused," he says.
Hywood has embarked on a strategy of digital first, which has seen the big print centres of Chullora and Tullaramarine close down.
Asked by AFR whether a merger with Macquarie was still an obvious move at the right price Hywood said: “We have always seen that a consolidation of radio talk, news and sport is a pretty rational thing to do. It did not occur for a variety of reasons. It does not mean it won’t occur in the future.”
Hywood insists radio will remain a key part of Fairfax’s multi-platform strategy.
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