APN News & Media Limited today announced in a release that it will acquire full ownership of The Radio Network (TRN) and Australian Radio Network (ARN) from US-based Clear Channel Communications for $246.5 million.
Chief executives Michael Miller (APN), Jane Hastings (TRN) and Ciaran Davis (ARN).
This move will give APN 100 percent control of what it claims is the largest network of radio stations across the trans-Tasman region.
In the New Zealand market, this means that APN’s radio offering will be spread across Newstalk ZB, Radio Sport, Coast, Classic Hits, ZM, Radio Hauraki and Flava.
In addition to these seven Kiwi stations, APN will also acquire 12 radio stations operated by ARN across the ditch.
And the deal also has a digital element, in the sense that APN has secured a ten-year arrangement with Clear Channel to operate and broadcast iHeartRadio in New Zealand and Australia. This effectively gives APN the ears of the 274,000 registered users that have already subscribed to the online music service.
However, this doesn’t mean that APN will have to restrict its iHeartRadio activities to the Antipodean region, because the deal also gives the media conglomerate the exclusive option to act as an implementation partner for iHeartRadio in parts of Asia.
“This transforms APN,” said APN chief executive Michael Miller in the release. “The majority of our earnings are now in businesses that have been consistently growing and have considerable further upside. It also gives us flexibility to pursue new revenue generating opportunities across our portfolio of businesses.”
Despite the change of hands, Miller says there are no major staff changes on the cards at this stage.
“TRN has one of the best management teams in the business and with no management changes planned there won’t be any disruption to day-to-day operations.”
TRN chief executive Jane Hastings also said that the network’s approach remained unchanged.
“Our clear strategy is to build on our market-leading position and expand our audience base by identifying with younger listeners and growing our digital presence.”
She also expressed enthusiasm about the prospect of further collaboration with the iHeartRadio brand.
“iHeartRadio not only gives us access to an expanded, younger audience, it also provides us with the scope to deliver new ways for our advertisers to connect with the core 18-54 target audience in a measured way,” she said.
Given that this is APN's first major acquisition since selling several of its magazines to Bauer Media, the conglomerate will no doubt be hoping that its radio networks successfully push revenue over the next few years.
In the past year, TRN has delivered revenue growth of nine percent from the previous year, but APN’s full-year results (released today) were mixed.
Across the board, APN’s revenue underwent a slight year-on-year dip from AU$823 million in 2012 to 817.2 million to in 2013. Despite this drop, net profit went up from AU$49.6 million to 59.3 million.
The results were not as promising for the New Zealand arm of APN, which recorded a year-on-year decline of seven percent. APN did, however, comment in its report that the revenue decline was moderating from previous years.
As an interesting side note, TRN recently became the exclusive radio partner and a key sponsor for the 2014 American Express Queenstown Winter Festival, a position previously held by Mediaworks.
The annual event, which runs between 20 and June, attracts approximately 45,000 attendees each year, and it's worth an estimated $57 million to the Queenstown's economy.