Business of Media
Southern Cross Austereo mulls options for capital injection
Southern Cross Austereo is believed to be considering convertible notes to help it trade through the advertising hit from the coronavirus pandemic, reports The AFR’s Max Mason.
Sources said a number of investment banks are pitching to Southern Cross to help the radio network and regional television broadcaster work out the best way forward. Last week, the company’s long-time advisor Luminis Partners was sounding out which investment banks would be available to work for Southern Cross.
Forward bookings for advertising markets have become incredibly muddy over the past fortnight as the coronavirus pandemic rips through financial markets and advertisers cancel or push back spending.
Nine, Seven tower joint venture TX Australia sues ACCC
A broadcast tower joint venture between Nine Entertainment and Seven West Media is taking legal action against the competition regulator arguing it lacks authority to mediate a dispute with Network Ten over access to its infrastructure, reports The Sydney Morning Herald’s Zoe Samios.
Ten had been seeking access to TX Australia’s towers but was unable to agree a price. The case was taken to the ACCC, which ruled it had the power to arbitrate the dispute, a point TX Australia disagrees with.
The case is the latest in a saga spanning years between TX Australia and Ten. Ten was previously a joint owner of TX Australia with Seven and Nine. However the pair seized on Ten’s descent into administration in 2017 to activate a clause allowing them to buy its stake in the transmission tower operator for a combined $22 million last May.
Seven likely to push back studios and ventures sales
Seven West Media is expected to hold fire on a range of asset sales, including its ventures portfolio and studios business, amid increasing lockdowns and fallout from the spread of coronavirus in Australia, reports The AFR’s Max Mason.
Seven had already been in discussion with the banks in its syndicate and talks are well advanced.
Seven has been looking to sell Seven Studios, its ventures portfolio – which includes stakes in Airtasker and SocietyOne – and its half stake in broadcast infrastructure business TX Australia – to ease its large debt burden, which sat at $541.5 million at its half-year results.
Given the economic backdrop and uncertainty around programming pipelines, with many shows across Australia and different studios being impacted by production shutdowns because of coronavirus concerns, it’s believed Seven has made the decision to hold out on selling most of the assets it has earmarked so it can get appropriate prices later on.
Sources told the Financial Review that prospective buyer ITV is unlikely to buy anything at this point as it deals with the fallout of the coronavirus on the production industry.
Regional broadcasters request emergency relief from Minister
Regional television broadcasters WIN Corp, Prime Media and Southern Cross Austereo have urged the government to provide emergency assistance to tackle an existential crisis for media outside of capital cities amid the COVID-19 pandemic, reports The AFR’s Max Mason.
The three broadcasters held emergency meetings with Communications Minister Paul Fletcher last week to discuss the collapse in the advertising market caused by the spread of the virus in Australia.
“Minister Fletcher has heard from many stakeholders in the media sector in the past week,” a spokesman for the minister said. “It’s clear COVID-19 has put the media sector under enormous pressure, particularly through sharp advertising downturns.
“The current situation has amplified the long-running structural issues – particularly competition from global digital platforms which are capturing much of the audience and advertising revenue previously held by television, radio and newspapers.”
Talent manager Glenn Wheatley expresses interest in AAP
Talent manager Glenn Wheatley has emerged as an unlikely potential suitor for the Australian Associated Press after an expressing an interest in buying the newswire service, reports The Sydney Morning Herald’s Zoe Samios.
All interested parties will be supplied with financial information about the organisation week, but no bids have been lodged. The deadline for bids is April 9.
AAP subscribers including Daily Mail, Guardian Australia and Verizon Media are still in discussions about pooling resources and forming journalism partnerships that could replace the newswire when it closes in June.
News Corp Australia cuts paywalls to free up virus reporting
News Corp Australia boss Michael Miller has been assured by government that news media will be deemed an essential service in the event of further shutdowns as the media company opens up its paywalls for metro mastheads during the global crisis, reports The Australian’s Michael Miller.
In a bid to keep Australians better informed during the COVID-19 crisis, News Corp will lift the paywalls on its metro mastheads, including The Daily Telegraph, Herald Sun and The Courier-Mail, to new customers signing up in the next two weeks. They will be given free access for 28 days and 50 per cent off for the following month.
Miller, executive chairman of News Corp Australasia, described the initiative as “the right thing to do”. “We debated as to what do we lock, what we unlock, and we came to the conclusion that we want Australians to stay connected and for people to stay informed,’’ Miller said.
Miller said in his discussions with government the media company had been classified as “an essential service”, which will allow News Corp mastheads, Sky News and Foxtel (majority-owned by News Corp) to keep distributing and broadcasting throughout the crisis.
“The governments have indicated that they consider media and our newspapers to be essential services. So it’s comforting to hear that.”
Miller accepted that some community publications might have to suspend printed editions if there was less activity in the real estate advertising market in the wake of auction restrictions.
HT&E well positioned to weather pandemic storm CEO Davis
Here, There & Everywhere boss Ciaran Davis will not rush into any merger or acquisition opportunities, but is anticipating another round of consolidation in the media market later this year, reports The Sydney Morning Herald’s Zoe Samios.
The company, which owns radio stations KIIS, Gold FM and The Edge, is one of the better placed to make a move in the current media landscape, but Davis is wary because of market uncertainty caused by the COVID-19 pandemic.
“When this is all over, and it will be all over, I have a strong view that the business models will have changed and that there will be consolidation happening again,” Davis said.
To assist with the low spend caused by the pandemic, Davis wants the government to spend more money on advertising through radio.
“The ad market has taken a massive thumping in the past two the three weeks,” he said.
“What we have seen is that the traditional strength of radio, its immediacy, cost-effectiveness, quick turnaround time…they are still there. We are seeing categories of spend increase… but, at the moment, it is not outweighing the loss of revenue.”
A main focus, he said, remains its staff. “It’s literally looking at the core business, protecting cash as much as we can and protecting jobs as much as we can,” he said.
Nick Tabakoff: Alan Jones v Alan Joyce war goes viral
They’re calling it Jones v Joyce II, reports The Australian’s Nick Tabakoff.
Last year, Alan Jones lobbed a huge grenade when he accused Qantas boss Alan Joyce of pressuring Rugby Australia (of which Qantas is the major sponsor) into its explosive sacking of Israel Folau for anti-gay comments. For his part, Joyce described Jones’s claim as “outrageous”.
But last Thursday on his 2GB show, Jones doubled down by opening up another front against Qantas, this time involving the coronavirus.
Jones’s most explosive claim was The Flying Kangaroo had helped hasten the spread of coronavirus in Australia by pressing ahead with direct flights from the virus’s original epicentre, China to Australia, and at the time, playing down the risk.
Jones went on to accuse Joyce personally of “ugly behaviour” and “bucketing” his major competitor, Virgin Australia, amid reported comments relating to Virgin that governments should not be in the business of supporting companies that had been “badly managed” for years. Jones also claimed to have an “audio recording” of Joyce urging his staff on a conference call “to petition their federal MPs against Virgin”.
3AW’s Neil Mitchell calls for an end to Daniel Andrews cold war
Melbourne’s most powerful broadcaster, Neil Mitchell, wants the coronavirus to be the watershed moment that finally ends his longstanding cold war with the city’s most powerful politician, Daniel Andrews, reports The Australian’s Nick Tabakoff. Mitchell is using The Australian to call for a “truce” with the Victorian Premier, following the unprecedented events of recent days.
The 3AW morning presenter believes Andrews’s boycott of his show comes down to a testy interview between the pair in 2017, when Mitchell accused the Premier at the time of “political trickery”. As Mitchell now freely confides: “He was not happy with this interview and not happy with my editorials on several stories.”
But three years on, Mitchell believes it is time for the pair to put their differences aside.
Jonathan LaPaglia rules out Survivor switch to Queensland
When I speak with Jonathan LaPaglia he is hunkered down in California, unable to attend the recently filmed Australian Survivor Reunion, reports TV Tonight’s David Knox.
For host LaPaglia, who is himself an avid fan of the format, it’s a big disappointment but a necessary one. 10 go-to guy Osher Günsberg steps into the studio with LaPaglia announcing the winner via satellite (he declines to reveal quite how that unfolds).
More frustrating is the delay to the next season which was due to film in Fiji in April and screen in coming months. Nor is it practical to relocate to the tropics of Queensland, either.
“Every production around the world has been put on hold and we’re no exception,” he explains.
“It’s not going to be possible until we’re on top of the pandemic -not only from an insurance point of view, but just the logistical point of view.
“You may be able to isolate the cast for something like Survivor, but you have a crew that’s still functioning within the community, wherever that is.
The crew comprises some 200 to 300 people.
“Not only do we have Australians that we transport over to Fiji, but we also have an equal amount of local hire on transportation, construction. catering, security. They’re involved in everything.”
Producers had originally mapped out a three-way final Tribal Council, but tonight only two of David, Moana and Sharna will proceed beyond the very last challenge.
NRL offered $100m emergency fund to bail out struggling clubs
The NRL has been offered a $100 million emergency loan from a British private equity group to bail out struggling clubs facing an uncertain future and possible bankruptcy, reports News Corp’s Phil Rothfield.
The deal has been secured by Melbourne Storm director Bart Campbell and would be used as a line of credit for the clubs but distributed by the NRL on a case-by-case basis.
The loan would be guaranteed by funding from the broadcast deal once the game resumes.
The offer is on the table for the next meeting of the independent Commission to consider.
“We’ve had lots of offers for finance and we’re looking at a number of options,” Commission chairman Peter V’landys said.
The AFR reports:
British private equity firm CVC Capital Partners is believed to be one of the firms to have had informal discussions about a $100 million loan facility to help NRL clubs stay afloat during the COVID-19 pandemic.
Leagues face less lucrative rights deals as seasons suspended
The AFL and NRL are likely to be offered extended but reduced sports rights deals in the wash-up of the coronavirus crisis, which will likely never see the sports return to a high watermark of previous multi-billion-dollar broadcast deals, reports The Australian’s Leo Shanahan.
Nine Entertainment chief executive Hugh Marks met with NRL boss Todd Greenberg and chief commercial officer Andrew Abdo at Nine headquarters last week to plead their case. The NRL officials were told there would be no payment if the competition did not continue.
Foxtel will also not pay the NRL its share of the broadcasting payment, but is still in active talks with the NRL about what a post-COVID-19 season could look like.