Job losses expected as Fairfax begins operational radio review following MRN deal

Jobs losses are expected across Fairfax Radio Network and Macquarie Radio Network following confirmation of their merger today with a review of operations now underway.

Fairfax Radio managing director Adam Lang told staff in an email leaked to Mumbrella that the merger will see “some cost synergies and efficiencies to be achieved in some functions and duplicated roles”.

Staff briefings and a conference call were held today ahead of further consultations in the new year. The merger and sales process is expected to be completed by March.

Lang said the developments are “significant and fast-track our ongoing vision to become the number one information and entertainment radio network in Australia”.

The email confirmed 2UE, which will now operate in the same stable as 2GB, will “continue to operate as a News, Talk station” which will be “focused on growing audiences of, for example, John & Garry, Stuart Bocking, and George & Paul in their continued winning weekend position”.

“I expect that the functioning of our Content and News teams nationally will see benefits from the strengthening of the network,” Lang told staff.  “The merger does, however, allow for some cost synergies and efficiencies to be achieved in some functions and duplicated roles. More information will be provided once a review of operations has been completed.

“We expect the merger and sale process to be completed by March 2015. There are several steps which need to be undertaken and it is reasonable to expect that our Sydney and Perth teams will start to be involved in preparations. We expect there will be a lesser extent of change experienced in our Melbourne and Brisbane teams.”

The communication acknowledged that the merger will create “uncertainty”, adding “we will aim to complete our review of operations and develop implementation plans as quickly as possible so we can provide details to our staff, audiences and clients.

“In the meantime, and as much as possible, it will be business as usual. We all know our goals and must continue to work hard to achieve them.”

Lang said having 2GB and its own 3AW station in Melbourne in the same network was “seriously compelling”.

“It creates significant sales opportunities that were previously not available to advertisers (for example, buying across the combined audiences of Alan Jones and Ray Hadley in Sydney, and Ross and John and Neil Mitchell in Melbourne),” he said.

Turning to the sale of 96FM, Fairfax said it had a “very attractive offer” of $78m from APN News & Media.

“The station will become part of a growing and dynamic national FM music network and will be well placed to deliver compelling media solutions for advertisers,” the email said.

“Sales teams in Perth continue to sell across 96FM and 6PR and both stations remain working from the same offices.

“Thank you to everyone at 96FM, which has been a great success story for FRN. Following the re-launch in 2012 to ‘Keep Real Music Alive’, 96FM achieved the No. 1 FM ranking in Perth once in 2012 and three times in 2013. In the last survey of 2014, the station finished the competitive year in the FM top three.”

Steve Jones

The email to Fairfax Radio staff:

Dear All,

Today is an important day for Fairfax Radio Network (FRN).

We have announced a merger with Macquarie Radio Network (MRN) to become a stronger national News, Talk and Sport radio network, with the number one stations in Sydney (2GB) and Melbourne (3AW), alongside 2UE in Sydney, Brisbane’s 4BC and Perth’s 6PR – as well as Music stations Magic 1278 and Magic 882.

These developments are significant and fast-track our ongoing vision to become the number one information and entertainment radio network in Australia.

We have also announced that we will sell 96FM to Australian Radio Network (ARN).

I appreciate that this note is long and that at this time of year many people are taking a well-deserved break. I ask that you take time to understand this significant development.

Staff Briefings

Before we get into the detail, please note there will be Staff Briefings with station management held at FRN offices today.

Additionally, a Conference Call will be held today at 12:00pm (AEDST) for all FRN staff. I will outline the changes and take your questions. Staff can take part at our offices or via a dial-in facility – the details will be sent out shortly.

There’s also a Question & Answer document which will be available.

Management is available to provide you with information and answer your questions – and there will be further briefings in the New Year.

It is important that everyone in our business has the right information and feels confident in communicating with each other, our audiences  and clients about our future as a stronger national radio network.

The Merger

Subject to certain approvals, we will merge FRN (excluding 96FM in Perth) with MRN, owner of the highly successful Sydney station 2GB. Its achievements are similar to the excellence of our 3AW in Melbourne. A network with these two stations is seriously compelling and creates significant sales opportunities that were previously not available to advertisers (for example, buying across the combined audiences of Alan Jones and Ray Hadley in Sydney, and Ross and John and Neil Mitchell in Melbourne).

2UE will continue to operate as a News, Talk station – focused on growing audiences of, for example, John & Garry, Stuart Bocking, and George & Paul in their continued winning weekend position.

I expect that the functioning of our Content and News teams nationally will see benefits from the strengthening of the network.

The merger does, however, allow for some cost synergies and efficiencies to be achieved in some functions and duplicated roles. More information will be provided once a review of operations has been completed.

A regulatory requirement of the merger is the sale of 2CH in Sydney.

96FM

Part of the changes announced today involves entering an agreement to sell 96FM to ARN. Fairfax received a very attractive offer to sell 96FM. The station will become part of a growing and dynamic national FM music network and will be well placed to deliver compelling media solutions for advertisers. Sales teams in Perth continue to sell across 96FM and 6PR and both stations remain working from the same offices.

Thank you to everyone at 96FM, which has been a great success story for FRN. Following the re-launch in 2012 to ‘Keep Real Music Alive’, 96FM achieved the No. 1 FM ranking in Perth once in 2012 and three times in 2013. In the last survey of 2014, the station finished the competitive year in the FM top three.

Amongst the FRN stable 96FM has been the only FM station. We have two other great AM music stations in Magic 1278 in Melbourne and Magic 882 in Brisbane, with the audience proposition ‘The Songs You Know and Love’. Our Magic stations are generally aiming for a more mature audience than 96FM and remain a vital part of our network. We will continue to grow and develop opportunities in the music radio space.

Next Steps

We expect the merger and sale process to be completed by March 2015. There are several steps which need to be undertaken and it is reasonable to expect that our Sydney and Perth teams will start to be involved in preparations. We expect there will be a lesser extent of change experienced in our Melbourne and Brisbane teams.

We appreciate the uncertainty that this process may create, so we will aim to complete our review of operations and develop implementation plans as quickly as possible so we can provide details to our staff, audiences and clients.

In the meantime, and as much as possible, it will be business as usual. We all know our goals and must continue to work hard to achieve them.

Summary

• Today we announced two important transactions for FRN – a merger with Macquarie Radio Network; and the sale of 96FM to ARN.

• Completion of these transactions is expected to be achieved by March 2015.

• It remains business as usual, for the most part, while planning and preparations happen. Any changes will be communicated as soon as possible.

We look forward to speaking with you throughout today and into the New Year about these exciting developments for FRN.

Any questions, please speak to your manager, or ask during the Conference Call session being held today.