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‘Never say never’ to us buying Prime or SCA’s TV stations, says Ten’s Jarrod Villani

The commercial chief of Network Ten has indicated that the company is open to taking over either Prime Media or the TV division of Southern Cross Austereo (SCA) to create a national operation if a deal can be done at the right price.

The comments came from chief operating and commercial officer and executive vice president, ViacomCBS Australia and New Zealand, Jarrod Villani, in an interview with the Unmade podcast.

Villani: Owner ViacomCBS is supportive of further acquisitions

Villani, who joined the company at the beginning of the year, told Unmade that a deal could be done if it worked for both parties.

Until the media ownership laws changed in 2017, no TV network was allowed to reach more than 75% of Australia’s population. As a result, Seven West Media, Nine Entertainment Co and Ten ViacomCBS own TV stations in the state capital cities of Sydney, Melbourne, Perth, Brisbane and Adelaide, but until now have reached regional viewers through affiliate arrangements. The regional broadcasters give the networks a fixed percentage of their revenue in return for being allowed to take their feed.

Nine’s major affiliate deal is with WIN Corporation, owned by Bruce Gordon who is also Nine’s biggest shareholder. The arrangement kicked off in July and will run until at least 2028. In last month’s Nine Upfronts, the two companies announced that they have effectively merged their sales operations.

Prime Media’s long term affiliate deal with Seven was extended again in 2018 and has about 20 months left to run. In 2019, Seven attempted to merge with Prime to create the first national TV operation, but shareholders including Gordon and Australian Community Media proprietor Antony Catalano voted down the deal.

And when WIN realigned with Nine in July, SCA became Ten’s main regional affiliate. However, the two companies signed a shorter two year deal, to end at the same time as the Seven-Prime arrangement.

SCA, which currently has a market capitalisation of just under $600 million, is also the country’s biggest radio player. SCA CEO Grant Blackley has made clear that he sees the company’s future mainly in audio, with the local TV operation for sale at the right price.

Prime Media currently has a market capitalisation of $85 million. However shares are tightly held. Seven West Media owns just under 15 per cent. Antony Catalano and business partner Alex Waislitz have been creeping up the share register and now hold just under 23 per cent. Gordon, who has been gradually selling his shares to Catalano, now holds about 11.4%.

Villanni joined to lead the commercial operation after nearly a decade as partner at KordaMentha. The insolvency advisory firm ran Ten when it was forced into administration in 2017 by then shareholders Lachlan Murdoch and Bruce Gordon, before creditor CBS bought the company ahead of its own merger with Viacom.

During the Unmade interview to coincide with Ten’s Upfronts yesterday, Villani was asked whether he had ambitions to create a national offering for Ten by buying either Prime or SCA.

Villani replied: “That has to work for both parties, obviously. So I think that like all investment activity, whether you’re talking about ViacomCBS, or Seven or Nine or whoever you might be talking about at any point in time, we work through the process of saying, does this make sense? Does this work for both parties? And there can only ever be an agreement if it does work for both parties. So, I view it like all commercial agreements. You never say never, you see what unfolds, you see what can work for each of the parties and you make those decisions as you go.”

Villani also signalled that he believed that ViacomCBS would back him in making an acquisition if the business case stacked up. He said: “We have terrific support, full-stop, internationally for our investments in Australia, be they in content or further acquisitions or whatever it might be.”

To hear the full podcast, visit Unmade, which is published by Mumbrella’s editor-at-large Tim Burrowes.

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