Radio Networks May Change Hands; CanWest Mediaworks

By VAUGHAN, Gareth

Over $500 million in New Zealand radio assets could change hands this year with the owners of the country’s two largest commercial radio networks reviewing their positions.

Canada’s CanWest Global, 70 per cent owner of TV3, C4 and RadioWorks, is considering selling its Kiwi assets as part of a strategic review of its Australasian businesses. The ownership structure of its rival, the Radio Network, is also under a cloud.

It is owned through a joint venture between New Zealand Herald publisher APN News and Media and America’s Clear Channel Communications. Bought last November by a private equity consortium for $US26.7 billion ($NZ38.5b), Clear reportedly wants out.

APN spokesman Luis Garcia declined to comment.

Analysts estimate RadioWorks could be worth about $250m and the Radio Network perhaps $50m more. The two companies have 83 per cent of the national commercial radio audience and make 92% of commercial radio revenue.

The strong duopoly the two enjoy is not expected to change in a hurry. Radio businesses have lower fixed costs than TV. Numerous small and regional advertising clients make radio’s bottom line less beholden to big advertisers.

“Radio’s spread of risk and exposure means lower (earnings) volatility than TV,” said David Lane, UBS director of investment research.

Goldman Sachs J. B.Were media analyst Rodney Deacon said publisher Fairfax Media, which owns The Press, was one possible radio buyer. So were Australian groups Austereo and Macquarie Media, plus private equity firms attracted by commercial radio’s steady income, duopoly and strong brands.

Joan Withers, Fairfax Media New Zealand’s chief executive and a former chief executive of the Radio Network, said she would “never say never” to Fairfax considering buying radio assets.

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WHAT THEY OWN

THE RADIO NETWORK

Newstalk ZB

Classic Hits

Radio Sport

ZM

Hauraki

Viva

Coast

Flava

RADIOWORKS

The Edge

More FM

The Rock

Solid Gold

The Breeze

Kiwi FM

Radio Live

Radio Pacific

(c) 2007 Press, The; Christchurch, New Zealand. Provided by ProQuest Information and Learning. All rights Reserved.