Selling Southern Star not straight forward. Nice for Fairfax Media to update us on yesterday’s Crikey scoop that the company was thinking of selling Southern Star, the TV production business it bought last year in the break up of Southern Cross Broadcasting (along with the AM radio talk stations owned by Southern Cross). The SMH reports:
Bruce Wolpe, a spokesman for Fairfax, said Southern Star was a “prime asset and is performing strongly”. For several months, the company and Southern Star had been “exploring options to further improve the business and maximise the company’s value,” he said. “This could involve a trade sale, strategic partnership or retaining Southern Star within Fairfax Media.”
I wonder why Bruce didn’t mention a private equity financed management buyout, which I hear has been canvassed, and there could be some interesting investors. But there’s a big roadblock for any sale of Southern Star to any other group. Namely, the sales contracts the production house has with various Australian producers/Networks to sell their programming in offshore markets. If what I have been told is true, most of these contracts can be terminated on 30 days notice if Southern Star is bought by someone these producers and TV Networks object to. So to be a smooth transition, Fairfax and/or Southern Star managers have to find someone they can work with.
That would rule Seven, Nine or Ten out from buying Southern Star or doing a deal, even though Seven’s contract to market Home and Away offshore through Southern Star is one of its most lucrative deals, as is the McLeod’s Daughters contract. So the most obvious partner for management would be Endemol, which has pots of money, or a private equity group like Pacific Equity Partners, Archer Capital or Ironbridge. Endemol would not stay with Southern Star if Freemantlemedia (owned indirectly by the Bertelesmann Group of Germany through RTL) bought it.
Besides Big Brother, Endemol owns the format rights to Seven’s very successful Deal Or No Deal which runs at 5.30pm Monday to Friday and helps keep Seven news well in front of Nine’s struggling business. The only obstacle for Fairfax is its reluctance to accept that the assets are worth a lot less than what they paid: the loss of BB is part of that, but the damage the strong Australian dollar does to sales income and profits is another, plus the worsening outlook for TV advertising over the next year or so. Southern Star’s value is partly a reflection of the advertising outlook for Australian commercial TV and the value of the dollar, and the ratings success of its various productions. Fairfax is now only just full comprehending that equation. — Glenn Dyer
Hammer the message. Here’s a copy of the latest ad for the Mitsubishi Lancer that featured in The Courier Mail on Wednesday July 23. You’d think that Mitsubishi would have advanced from openly inciting hoonish behaviour… however read the body copy:
DEFY PHYSICS: Brutal 217kW Turbocharged MIVEC Engine. Race-bred Twin Clutch Sport Shift Transmission. Ingenious Super All-Wheel Control System. Hammer the straight. Scream through the corner. The new Lancer Evolution is waiting at lancerevolution.com.au
The Federal Chamber of Automotive Industries (FCAI) have a code that they expect their members to adhere to:
Advertisers should ensure that advertisements do not depict, encourage or condone dangerous, illegal, aggressive or reckless driving. Moreover, advertisers need to be mindful that excessive speed is a major cause of death and injury in road crashes and accordingly should avoid explicitly or implicitly drawing attention to the acceleration or speed capabilities of a vehicle.
— Crikey reader Peter Scruby
Do you hear a reporter clapping? Leading up to Barack Obama’s speech yesterday at the Unity convention in Chicago, there was some media speculation about how ethically problematic it would be if reporters attending the conference—the largest gathering of black, Hispanic, Native American and Asian journalists in the country—were to break into cheers when Obama took the stage. — Columbia Journalism Review
Even lamer than Second Life. I was well into my first hour as an avatar in Google Lively, the search company’s frustrating and dull new virtual world, and I was bored. — Slate
Buyers want newspapers to reinvent model. Shrinking newsrooms. Falling operating margins. Double-digit declines in ad revenue. American newspapers today are awash in ink — but the ink is red. Soaring newsprint prices and stalled ad business have, in fact, led analysts to call this year the worst for newspapers since the Great Depression. — Mediaweek
Mr T Snickers ad pulled for being offensive to gay people. Mars has pulled a UK TV ad for Snickers featuring Mr T harassing a speed walker for being a “disgrace to the man race” after US complaints that it was offensive to gay people. — The Guardian