Media mogul heir, Lachlan Murdoch, is buying up the Australian airwaves with news that his investment firm Illyria has bought up rest of DMG Radio Australia that he doesn’t already possess – a move that will potentially go unchallenged by media regulators.
The Age reports the $120 million deal will see Murdoch taking full ownership of the radio group that runs and operates Australian stations such as Nova, SmoothFM, Star 104.5 and digital radio stations Nova Nation and Koffee.
Mr Murdoch already owns half of the broadcaster after paying a similar sum in 2009 to the UK’s Daily Mail and General Trust PLC for 50% shares and management rights.
Illyria’s investment in DMG has doubled the increase in the company’s pre-tax earnings and an estimated 60% turn of profits in Mr Murdoch’s investment. An investment that continues to grow according to the recent accounts from the Australian network group; showing a jump from $94 million in revenue in 2010 to $123 million in September 2011.
Despite the network’s failure with the Vega radio station, replacing it with Classic Rock before expanding the Nova and Smooth FM brands, the DMG group has been increasing its profits – further lining the pockets of its new owner.
“When we acquired our 50 per cent interest in DMG in November 2009,” said Mr Murdoch in a statement, “we set out to create one of Australia’s leading media companies. Over the past three years, working alongside DMG’s wonderful staff, we have successfully implemented our growth strategy.”
Murdoch’s complete stake of the company is unlikely to face objections from any watchdog groups, as transitioning from 50% to 100% ownership does not represent a change in control.
Murdoch’s control of the radio includes the successful Nova brand, the station has become the #1 national network “for people 18 to 39″ since Mr Murdoch first invested in DMG.
Cathy O’Connor, Chief Executive of DMG Radio Australia applauded the company’s growth and Mr Murdoch’s purchase; explaining that they’d overcome the difficulties facing the media industry in Australia.
”DMG has always had plenty of organic growth available to it. We are realising that growth now.” said O’Connor. Adding that: “Every year we have been able to grow above market.”
O’Connor also expected that advertising, radio’s continued revenue stream, would continue to pick up alongside Murdoch’s investment. “‘I think the radio industry has always performed well in tough times,” she said. “I expect the ad market to recover slightly over the next six months and am confident we will continue to outperform the market.”
Murdoch’s Illryia investment and ownership of DMG Radio Australia expands his media empire, following in the footsteps of his father Rupert. His investments include a 9% share in the Ten Network and selling off his 10% stake in regional television group Prime Media last March for a profit. He is also the director at News Corporation, owner of News Ltd.