When
Alan Jones defected from 2UE to 2GB in 2002 it was heralded as the most
lucrative individual contract in Australian media history. The
widely-quoted arrangement was said to be worth $30 million over seven
years, plus up to 20 per cent of 2GB. Today we have more insight into
the arrangement after colourful Sydney business identity John Singleton
released the prospectus for the Macquarie Radio Network (MRN) float.

The SMHhad
the best coverage today, dubbing it a “Claytons float” because John
Singleton and Mark Carnegie will retain 93 per cent of the company. Why
bother? After all, who needs the pressure of all this public disclosure
— pressure which has apparently led 2GB to slash its advertising rates
to get revenue figures up as it goes to market. Maybe this explains the
disclosure that the prospectus is forecasting revenue to fall 8.2 per
cent to $39.5 million in 2004-05, and net profit to fall to $3.7
million from $13 million.

The
Parrot’s political power is well known, but his corporate power is now
also apparent as this deal is all about providing the mechanism for him
to realise his investment. In return for getting up at 3am over a
decade, Jones has an annual package worth about $4 million and owns 11
million MRN options that will cost him 22.43c each. If the $1 float
price is sustainable, that will deliver him a paper profit of about $8
million — but you have to ask the question whether he would ever be
able to dump his shares?

This will not really be tested in the
forthcoming float because only $3 million is being raised. MRN may
struggle to get the minimum 500 shareholders for an ASX listing and
will be one of the most thinly traded stocks on the market.Your
resident shareholder activist will certainly be wading into the market
to become a member of this exclusive club of shareholders, as we can
think of nothing better than grilling John Singleton about Alan Jones.

The
key question we’ll be raising at the first AGM is how MRN will prepare
for life after Alan Jones. This float is almost like selling the cast
of Home & Away. How do you value it when Bec Cartwright could wonder off and start a family with Lleyton Hewitt at the drop of a hat?

Crikey laughed at the original reports in The Australian
last year that MRN could be worth “up to $400 million”. The $1 float
price values the company at $72 million, a figure lower than the $80
million that Southern Cross Broadcasting paid for 2UE in 2001.

Alan
Jones is said to be motivated by his long-term rivalry with John Laws,
which might explain why his shift has been extended one hour into the
Morning slot occupied by the Golden Tonsils. Jones wants to achieve
higher ratings, earn more money and have a bigger pile of assets than
his older rival. Given that Laws collects about $5 million a year from
Southern Cross Broadcasting and is worth more than $100 million thanks
to some astute property plays over the years, that alarm clock will be
going off at 3AM for at least another decade before the Parrot can be
declared the winner of that very Sydney contest.

Check out the spin from yesterday’s release on the 2GB website. It tells you the full prospectus is now available here
on the newly created MRN corporate website, but when you visit the link
is missing and the message reads, “Please come back in 30 minutes to
view the prospectus”. Sounds like the whole exercise has been a bit of
a mess.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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