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The Sydney Morning Herald

2DAY-FM SOLD FOR $80M-PLUS

Author: By LEA WRIGHT, Marketing Writer
Date: 04/05/1989
Words: 544
          Publication: Sydney Morning Herald
Section: Business
Page: 26
The Lamb family's Broadcast Investments Pty Ltd has sold Sydney radio station 2DAY-FM to Adelaide-based radio broadcaster Austereo Ltd for a record sum estimated to be in excess of $80 million.

This is believed to be the highest price paid for an individual Australian radio station and bolsters the market value of FM licences - a comforting thought for FM operators as the Federal Government proceeds with plans for the conversion of a limited number of AM licences to the FM band.

Broadcast Investments acquired 2DAY-FM two years ago for the then record price of $70 million from Mr Mike Willesee's Trans Media group. Before that, it had been a long-time owner of Sydney AM station 2UE, before selling it to Mr Kerry Packer for $20 million in 1986.

Under the terms of the deal, Austereo acquires 100 per cent of 2DAY-FM Australia Pty Ltd, the licensee of 2DAY; while Broadcast Investments also receives a 15 per cent stake in Austereo and will appoint a director to the Austereo board.

Broadcast Investments managing director, Mr John Conde, will stay as chairman of 2DAY-FM.

Austereo's managing director, Mr Paul Thompson, said: "We have long believed that the future of radio lies on the FM band and have been progressively moving to put a national FM network in place.

"Clearly, Sydney is the jewel in the crown in that respect and because of its national compatibility with existing Austereo stations, 2DAY-FM has always been the obvious and most desirable station for us in the nation's largest and most profitable city."

2DAY-FM is widely regarded as Australia's most profitable radio station with a strong revenue base and moderate running costs. As 2DAY-FM managing director, and former founder of the Wesgo Ltd radio group, Mr Bob Scott, said: "This is a tremendous arrangement between two of Australia's leading media players and provides Austereo with real strength in the Sydney market."

In addition to 2DAY-FM, Austereo's radio network consists of 3FOX-FM Melbourne, 4BK Brisbane, SA-FM Adelaide, FM104 and 2CA Canberra, The Eagle in Perth and an interest in SEA-FM on the Gold Coast.

For Broadcast Investments, the deal signals a review of the company's radio and television interests in Austereo and, as the owner of television station, NWS9 Adelaide.

Mr Conde said: "We have cash, a position in Austereo and a television station in Adelaide. We are looking at a number of opportunities in media and outside of it.

"What we've done with the radio station is a good manoeuvre. We didn't want to just sell the station as the family has been involved in commercial radio since 1925."

 
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