Murdoch buys other half of DMG Radio for $100m
Lachlan Murdoch has bought the 50% of DMG Radio Australia he did not already own from Daily Mail and General Trust, his investment company Illyria has announced.
Mumbrella understands that Murdoch will pay $100m, plus 50% of whatever the company’s annual dividend is when its financial year ends in September.
Murodoch bought his first half share in the company from DMGT just under three years ago.
DMg Radio’s main assets are the Nova Network and the recently launched smoothfm, which replaced the failed launch of Classic Rock, which in turn replaced Vega.
In a statement Murdoch singled out CEO Cathy O’Connor for praise and said that the company’s earnings had grown while he had already seen a high internal rate of return on his investment. He said: “We are pleased to move to 100% ownership of DMG Radio Australia.
“When we acquired our 50% interest in DMGRA in November 2009 we set out to create one of Australia’s leading media companies. Over the past three years, working alongside DMGRA’s wonderful staff, we have successfully implemented our growth strategy.
“In that time Nova has regained its position as the Number 1 national network for people 18-39 and we have successfully launched SmoothFM. The EBITDA of DMG has doubled and the IRR on our initial investment is more than 60 percent.
“We have great confidence in the continuing potential of radio, great confidence in the management team we have built under Cathy O’Connor, and look forward to further growing DMGRA in the coming years.”
Murdoch’s other media investments include stakes in the Ten Network, where he is chairman, and regional broadcaster Prime Media.
While many will applaud Mr Murdoch’s move, others will be nervous, given economies will all most certainly have to be made. And what does the sale price — especially when compared to the cost of the licences in the first place — say about the value of SC Austereo, Fairfax and ARN?
User ID not verified.
I don’t think Lachlan Murdoch has investment in Prime Media anymore?
User ID not verified.
Considering DMG paid $153M for Nova Sydney and $100M for 95.3 Sydney – then buying half of the entire network for $100M is a bargain!!
User ID not verified.
Awesome. Looking forward to hearing the Paul Henry Breakfast show on Smooth fm, then. Should be a corker…. oh wait…
User ID not verified.