By Wade Kingsley, co-host of the Gamechangers Radio podcast
I’m glad people working in the media don’t have to wear uniforms.
Imagine going in for a fitting, then parading around in your corporately branded apparel, only to have it confined to the local op shop without much wear.
As far as the team at Southern Cross Austereo (ASX: SXL) is concerned, it might be a case of having a tailor on standby.
The proposed merger of SCA and Seven West Media (ASX: SWM) that will surely kickstart another season of consolidation, both make sense and are curious at the same time.
It makes sense with cost synergies and revenue opportunities, as mergers always do on the surface. Measure twice, cut once.
Curious because, at least from the SCA side, they are embracing the wardrobe of a business whose fabric is (still) largely dependent on free-to-air television. So while SCA shareholders are getting around in the latest street wear, they are now being asked to don a valour tracksuit to eat their roast chicken, watching the 6pm news.
‘All about audio’
Just 13 weeks ago, SCA divested their long-held regional television asset, declaring they were ‘all about audio’. I know media years are akin to dog years, but this is a lightning-fast turnaround in what is/was its ambition.
SCA CEO John Kelly had sprouted the strategy in a round of media interviews when the deal was announced, and the market responded enthusiastically. The share price is up around 30% from June 2025.
Audio is ‘on trend’ and has a great growth story when digital and addressable audio (read: podcasts) are included. Not so great when it’s focused on legacy broadcast radio alone.
SCA had already stared down its major competitor ARN (ASX: A1N) and fended off a proposed takeover 12 months ago. Since then, SCA have strutted the catwalk sharing improved ratings and revenue performance while ARN have been left wearing dark sunglasses watching from the front row.
The green Listnr uniform fits like a glove, but someone has dropped in a red FTA TV uniform to try on. So why the change?
SCA might say that the TV assets they held were exclusively regionally based, and SCA felt that they were better operated by an existing metro TV broadcaster. Sure. But with SWM they are about to get back into bed with local TV in Seven’s regional markets, and the first casualties will almost certainly be dual sales teams. Sadly, more people will be out of work in what has been a tough year/decade for media sales.
No doubt this move helps SCA defend its turf (for now) and grow its audience. The cross-platform promotional opportunities for their on-air talent and stations will improve reach. It could easily out-spend any competitor on FTA and SWM’s digital assets on contra airtime alone.
But can they make this new wardrobe fit – culturally, strategically? These are all questions that SCA shareholders have to weigh up before the AGM in November.
The quote doing the rounds when regional operator Southern Cross ‘merged’ with the then mighty Austereo in 2011 was that it was like St. Vincent de Paul buying Louis Vuitton.
Time will tell if the SCA shareholders see this as something akin to a Paris fashion show or if it feels more like ‘The Devil wears Prada’.