Hamish McLennan, chairman of ARN Media, has expressed interest in acquiring Nine Entertainment’s talkback radio stations, calling for the relaxation of media ownership laws that currently prevent such a deal.
McLennan described Nine’s radio division, which includes Sydney’s 2GB, Melbourne’s 3AW, and Brisbane’s 4BC, as a natural fit for ARN, which already owns KIIS FM, Gold 101.7, and the iHeart podcast network. “We’d definitely have a look at it if we could, but we’re precluded from doing that [by the media ownership regulations],” he said in an interview with the Australian Financial Review.
Media ownership laws in Australia, designed to prevent market concentration, have been in place for over three decades. These rules restrict any company from holding more than two radio licenses in the same market, a regulation McLennan described as outdated. “They were designed last century. We should look to level the playing field and make it easier for all media companies to compete,” McLennan said.
Despite the challenges, McLennan remains optimistic about the future of radio, pointing to its longevity and resilience. However, he emphasised the need for consolidation within the industry to compete effectively with global powerhouses.
“The companies are cheap, there is still a lot of revenue, and the audience is still growing, so there’s an argument that audio has longevity,” he said. “They have invested a lot ahead of the curve in their digital arms, and it feels like we’re going through that inflection point now. If anything is declining in radio, it’s AM. The audiences are pretty old and will shrink quickly.”
Last year, ARN attempted to acquire Southern Cross Austereo, owner of Triple M and Hit radio brands, but the deal fell through when ARN’s partner, Anchorage Capital Partners, pulled out over concerns about Southern Cross’s television assets.
“I think Southern Cross shareholders missed out on an opportunity to take some money off the table at a premium to the current share price and ride the upside in the deal,” McLennan said. While reiterating ARN’s interest, he made it clear the company wouldn’t overpay, adding that consolidation would allow for resource sharing and cost reductions. “For us, it was about getting our programming teams and our content deliverers, who have proven that they’re some of the best over the long term, to get a hold of some of those assets and to do it better.”
Nine’s radio division has faced its own challenges, with revenues falling 3% last year. The company has cut costs and shifted focus to digital and audio streaming ventures, which saw a 35% revenue surge.
Acting CEO Matt Stanton has deprioritised costly projects, such as moving 2GB’s studios to Nine’s headquarters, in favour of maintaining profitability. A Nine spokesperson told the AFR that the company was focused on building a stronger business while retaining its market leadership among over-40s, a demographic with resilient spending patterns.
Traditional radio may be grappling with digital disruption and shifting audience preferences, but if McLennan is right, the future of radio may lie in consolidation, innovation and the ability to adapt to an increasingly digital world.
