APN fails to halt Aussie radio decision

APN, Independent News & Media’s Australian media company has failed in its bid to stop the Australian Broadcasting Authority selling new radio stations in competition with its existing stations.

This is bad news for APN, 45% owned by IN&M, and its radio partner US radio giant Clear Channel, as they have 12 radio stations in Australia.

The Australian Broadcasting Authority (ABA) is to sell new radio licences in Sydney, Melbourne, Brisbane and Adelaide within the next 12 months. APN and Clear Channel have operations in each of these cities.

Commenting on the move Goodbody Stockbrokers analyst Neil Clifford said the decision had been expected and dates back to 1999 when the regulator postponed issuing new radio licenses for 4 years: “It is likely that the new licences will lead to greater competition for listeners and radio advertisers in the cities affected in the long run and is probably one of the reasons why APN has signalled that it may not have a longer term interest in radio.

“Separately, it appears that legislation may be passed to relax media ownership laws in Australia following reports that the government may have finally won support from the independent senators who were originally opposed it,” said Mr Clifford in a note to clients yesterday.

The Age newspaper in Australia yesterday reported that the ABA's decision comes after it received seven submissions from media groups: Austereo Group Ltd, APN News & Media Limited, DMG Radio (Australia) Pty Ltd, Star Broadcasting Network Pty Ltd, Clemenger Communications Ltd, Mr Phil Dobbie and Mr Brian Chew.

In a separate development a number of IN&M executives yesterday disclosed that they have exercised options to purchase shares in the company at just 74.9 cent. IN&M shares traded at 153 yesterday. The purchase of the shares has resulted in significant paper profits for some of the executives.