Grant Blackley says radio not TV is key to SCA revival and takes shot at Ten for lack of bravery

The new boss of Southern Cross Austereo Grant Blackley has backed radio over TV as the medium that can turn around the company’s fortunes and taken a shot at his successor at Network Ten for failing to make “bold” programming choices.

Southern Cross Austereo CEO Grant Blackley at the National Radio Conference

Southern Cross Austereo CEO Grant Blackley at the National Radio Conference

In a wide ranging interview on-stage at the National Radio Conference Blackley said the performance of the company’s main metropolitan affiliate Network Ten had hampered it in the last few years, and voiced concerns over Network Seven’s plans to live stream its programs into regional areas.

But he said his main job was to get SCA, which controls the Hit and TripleM radio networks and regional TV networks throughout Australia, to start “playing in the big pool” with advertisers again.

“Austereo used to play in the big pool, that was where the audiences were and that’s where the advertisers migrated to,” he told Mediaweek editor James Manning on stage.

“Since Kyle and Jack left and a few other things happened they probably went to the little pool and are hiding behind a tree. My job is to get them out from behind that tree and stop being in the little pool looking at the big pool and that’s the strategy.”

SCA turnaround

SCA’s flagship 2DayFM station in Sydney has struggled in the last two years since the defection of breakfast announcers Kyle Sandilands and Jackie O Henderson to rivals KiisFM – which combined with lower ratings for Network Ten’s shows had hit its advertising sales performance.

Blackley, who joined as CEO in June replacing Rhys Holleran, said his aim was to double the market capitalisation of the company, which currently sits at around $770m, but he said “radio will get us there, but TV will struggle to get us there”.

In October 2013 the SCA’s (ASX:SXL) shares were trading at $1.88, while today they were trading at $1.04.

Southern Cross Austereo share performance Oct 2013 to Oct 2015

Southern Cross Austereo share performance Oct 2013 to Oct 2015

Since Monday, when news Rove McManus was joining 2DayFM in the troubled breakfast slot, the share price has gone from 94c to $1.04.

SCA-234x323He said he thought the merger of Austereo and Southern Cross was in reality “an acquisition” which had created four separate companies, and he now “have to bring the company together to operate as one”, signalling he was looking at a rebrand.

The company would also look to staff up and invest in more talent and marketing in a bid to grow its value and audiences, Blackley said.

He also took a swipe at his predecessors in the way they had handled the business saying: “Coming into SCA it’s been a great company and is a great company. It’s got great brands, but I don’t think it had had the love and attention that it should, and there were a lot of easy fixes in my opinion and we’re just in the early stages of deploying that stuff.”

‘Master slave relationship’

Asked about the negotiations for a new network affiliation deal with Network Ten, which allows SCA to broadcast Ten shows to certain regional areas, he was tight lipped, although he described the current agreement as a “master slave relationship, and both sides have played their parts very well”.

However Blackley, who was CEO of Ten for nearly six years from 2005 to 2011, took a swipe at his successor James Warburton and his programming strategy for the ailing network to aim for a younger audience.

“They aren’t producing the same ratings they used to produce unfortunately, but they’re starting to get back a bit of their swagger,” he said.

‘They went through a period there where they went too young, and by going too young they went from the big pool to the little pool, similar to what we did with 2DayFm.  They’re starting to reinvest.

The Bachelorette has brought 'spark' back to TV says Blackley

The Bachelorette has brought ‘spark’ back to TV says Blackley

He cited shows like the Bachelorette as a “calculated risk” which had “bought some of the spark back to television”.

He added: “They went through a period there for two or three years where they didn’t take a calculated risk. I remember with Masterchef I wet to the board and said ‘we’re going to do a cooking show’, they said ‘that’s fine’ and ‘how much’ and I said ‘$35m’.

“They said ‘I don’t think it will work’ and I said ‘I think it will’ and there were many fathers to that success afterwards.”

He added: “They’re investing in large formats and doing the right thing, rather than a series of smaller bets from The Shire to Lara Bingle that frankly doesn’t do anything. It fills the holes but no-one should be proud of that.”

But he added that “what happens with Ten might be irrelevant” he said if media reforms are passed by the government.

Threat to regional advertisers

Asked if SCA would join the MCN sales house, which was set up to sell Foxtel’s inventory but recently took control of Ten’s sales, Blackley said they would consider it, but they had not been approached about it.

He also tried to stress the importance of locally focussed media with the regional communities, pointing to the advantages handed to digital players under the current regulatory system which prevents any one broadcaster reaching more than 75 per cent of the population.

Grant Blackley was interviewed by James Manning

Grant Blackley was interviewed by James Manning

“We have to be very mindful that if we erode the value of regional media through allowing an inequitable media policy at this point that allows Netflix to come over the top or Seven, Nine and Ten to stream their services over the top with national ads, what happens to the local advertisers in those respective markets who no longer have the ecosystem at the forefront of what they do?” he added.

Recently Network Seven announced plans to release an app to allow live streaming of its shows to anywhere in the country, which is seen as a threat to regional broadcasters.

Asked if he had concern over that Blackley said: “We do have concerns and we’ve expressed those to Tim [Worner] and the team at Seven and we’re awaiting a response.”

Alex Hayes

Mumbrella travelled to the Gold Coast as guests of Commercial Radio Australia. 


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