SCA sells regional TV licences to right-wing startup
Southern Cross Austereo has sold its last remaining TV assets to Australian Digital Holdings, a conversative broadcaster with plans to launch the right-wing Newsmax in Australia.
SCA announced the sale on Thursday morning along with half-yearly financial results that showed digital operations — primarily the Listnr streaming platform — breaking even for the first time.
The TV licenses cover areas in regional Australia, including Tasmania.
The buyer ADH has previously announced plans to launch a local version US TV network Newsmax, a competitor to Fox News and frequent host to US President Donald Trump.
“SCA is all about audio”, CEO John Kelly said. “The successful exit from television allows SCA to focus on building upon the positive momentum within our leading radio and digital assets.”
Unmade’s Tim Burrowes, who is also the publisher of Mumbrella, has previously noted the licenses should have been an attractive prize for Seven West Media.
“Seven West Media would be insane to let the Tasmanian licence slip through its fingers in particular,” he wrote when news of ADH’s interest first emerged.
The licenses cover Tasmania, Spencer Gulf, Broken Hill, Mt Isa, Darwin and Remote, Central and Eastern Australia, and were sold for $6.35 million. Of that, $3.75 million is cash and $2.6 million will be “received through the provision of transitional service arrangements.”
SCA said it intends to pay down debt with the upfront payment.
SCA considered an offer from ADH last November for its entire 93-station suite — believed to have been in the ballpark of $15 million — but subsequently offloaded its Queensland, southern New South Wales, and Victoria licences to Network 10 in December.
ADH was launched in 2021 by businessman Jack Bulfin and Alan Jones’ producer Jake Thrupp, who left the company in 2022.
The company’s chair is Maurice Newman, who was the former ABC chairman. Newman leads the consortium, along with Bulfin and former Seven News director Jason Morrison. Currently, the station streams five hours of content a day online.
The sale of all of SCA’s television assets is estimated to be in the range of $19 million – $24 million, a multiple range of approximately 4-5 times the forecasted FY25 EBITDA.
According to the company’s first-half financials, the regional TV assets lost $2.4 million during the half.
Digital revenue — chiefly the Listnr platform — grew to $22.1 million, up 42% year-on-year, and resulting in EBITDA just scraping into positive territory ($100k).
Overall, SCA posted first-half FY25 revenue of $209.7 million, a 5.3% bump, with EBITDA jumping to $24.1 million, a 24.6% increase. Net profit increased by 5.5% to $3.2 million.
SCA credited its improved financials to “continuing dominance of the lucrative 25-54 audiences in metro and regional radio markets, improving share of metro radio advertising markets, strong growth in digital audio revenues, and disciplined approach to cost management.”
The board will not be paying a half-year dividend, as it is focused on debt reduction.
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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Consider how little local uproar there was to Ten’s over-the-air service leaving Mildura, this sale may well see Ten signals leaving much of regional Australia.
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That price doesn’t value the millions of FTA watchers in the coverage area very highly. The asset has been purchased for about $1/person.
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SCA never had a clue about running TV channels. Let’s hope this new mob let the staff get on with rebuilding a run down business!
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Genuinely concerning news
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The question has to be asked that if SCA say they’re an audio business, and clearly they are since they have mismanaged and neglected television for so long, why did they not sell off the TV division soon after acquiring it from SCB?
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Well done SCA!
Freed of the shackles of FTA TV, SCA should do well.
As for the new network, well, given how Woke and Left leaning the rest of the networks have gone, it may actually do OK with the Boomers. That said, the Capex and Opex involved with running FTA TV is just horrendous! I wouldn’t like to be the CFO of any company running legacy FTA TV assets (liabilities).
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For who?
You think a Right leaning TV network is a threat to your brand of ‘democracy’? Or, are you worried about the inevitable loss of FTA TV in Regional areas? – That is going to happen regardless of who owns the licences.
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