A minor sidelight of the Solly Show on
Tuesday was a threat to the success of the Millionaire Factory’s latest
spin-off, Macquarie Media Group – alias country radio stations and blue sky.
The MacMedia book build came in near the
bottom of the suggested range – perhaps a sign that institutions might
finally be building some resistance to
the Millionaire Factory’s fee gouge and claims of financial magic.
But of course it’s still getting away and
the Macquarie gang still picks up its generous fees, even if they’re sacked as
managers, including the performance bonus that kicks in at what BankWest offers
The IPO closed too soon for anyone to
consider Telstra’s grand plan – which might be just as well for MacMedia.
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MacMedia consists of money looking for a
home and a bunch of country radio stations that are suddenly supposed to be
worth vastly more after visiting the Macquarie financial engineering works.
The important thing about country radio
stations is that they don’t face much competition – but that could be about to
The prospectus is quite dismissive of any
prospects of new technology muscling in on their territory. That largely depends on the Federal
Government continuing to do what existing media proprietors want it to do – and
the Macquarie machine with its bevy of ex-pollies and bureaucrats lobbies with
the best of them.
The new technology risk was dismissed quite
briefly on page 148 of the 218-page prospectus:
The increased penetration of new technology
such as the internet, satellite radio and datacasting (including iPods) may
impact on Macquarie
Regional Radioworks’ financial performance, financial position, cash flows,
distributions, growth prospects and therefore that of MMG and the price per Staplbed
Security. However, Macquarie
Regional Radioworks considers these risks to be low because:
commercial radio listeners
are able to engage in other activities simultaneously, such as driving,
exercise and outdoor activities;
there is likely to be limited
availability of spectrum for satellite radio; and
commercial radio is a
So there. You can walk and listen at the
same time. Elsewhere in the document
there’s a little discussion about the allowable spectrum for satellite radio, which
of course is all a matter of government licensing. If allowed, satellite radio
as it now exists in the US, could devastate the country audience, providing massive radio
choice and not just the traditional two kinds of music – country or western.
Bom-bom. But that’s a matter of Federal Government licensing.
There’s also mention of 3G mobile phones and
this is where it could become interesting. MacMedia’s view of what’s possible
or likely in the short to medium term certainly isn’t the same as Sol Trujillo’s
brave new world of a high-speed 3G country rollout.
So, while lobbying to keep a clamp on
available spectrum for satellite radio, will Mac Bank also be fighting to limit
what Telstra might be allowed to do with its brave new vision? I suspect that’s
a safer bet than the shares.