Business Spectator and Eureka Report chief Alan Kohler has scotched rumours that his business is about to be sold to Fairfax Media.
Speaking to Crikey this morning following days of reports in News Limited publications that the websites were a priority takeover target for new Fairfax CEO Greg Hywood — a good friend from their decades together at the media giant — Kohler rejected the speculation as baseless and untrue.
“I have absolutely no idea why The Australian is writing that. The business was not built for sale or we would have thought about selling. We don’t want to sell, because we’re enjoying it too much. We love it,” Kohler told Crikey.
“If Fairfax wants to knock on our door we’re be delighted to talk to them…but there are no talks happening and nothing’s going on.”
Hywood was finally confirmed as Fairfax’s permanent CEO yesterday with a brief to turn around the failing fortunes of the company’s metropolitan mastheads The Age and The Sydney Morning Herald, and arrest devastating circulation declines at The Australian Financial Review. One of his first tasks was said to be to eliminate the friendly fire from his old workmates.
“It is certainly true that Greg and I have a history together but that absolutely does not mean that we’re thinking of selling anything to him,” Kohler said.
“We’re part way through building a business, so [The Australian] are just making it up…we’re not going to put out a press release denying it.”
Based on yesterday’s sale of The Huffington Post to AOL for $US315 million, a five times earnings multiple on revenue of about $4.5 million would value the combined Business Spectator–Eureka Report group at about $25 million. However, insiders are believed to have placed a much higher price on the company’s head.
Eureka Report charges around 15,000 subscribers $385 a year for access (some subscriptions are monthly and some are discounted), while Business Spectator, which was added to the empire in 2007, is currently free and enjoys a degree of cross-subsidisation.
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Speculation over a pending sale reached boiling point yesterday, with Crikey founder Stephen Mayne outlining an elaborate scenario in which Kohler would return to AFR one day a week to write the Saturday back page with Eric Beecher, who has a stake in both Kohler’s business and Crikey, moving to the Fairfax board.
But Mayne said Hywood’s overriding imperative would be to make sure the country’s best financial scribes returned to his lair:
“The best business journalists traditionally work for Fairfax. If Fairfax want to retain that role in business journalism, then they need to hire the best journos in the country and pay what the market is worth.”
“Rupert is the real enemy, not Fairfax.”
Mayne added that Hywood would have to purge Financial Review Group chief Michael Gill and AFR editor Glenn Burge, who have been repeatedly perturbed by Business Spectator‘s presence in the online space.
Another publishing group said to be in Hywood’s sites, Metro Media group which publishes the Fairfax-slaying Weekly Review, also denied that there were any deals in the immediate offing.
“That’s a categorical no, there’s been absolutely no approaches,” said publisher Antony Catalano — also a former Hywood colleague at The Age, adding that it would be awkward for Fairfax to buy the same business twice.
In 2003 the company famously purchased Text Media — which controlled many of the same advertising contracts now owned by Catalano — from current Crikey publishers Eric Beecher and Di Gribble for $67 million. At the time Catalano, as a Fairfax executive, was busy trying to poach the agents back from Beecher, a task he would complete seven years later following the expiry of his non-compete clause.
But with Business Spectator and The Weekly Review off the table, Fairfax insiders say Hywood could be casting his net further afield, rationalising his sales team and moving to connect with consumers through an online discounting company in the mould of the US’ Groupon.
Among personnel changes at the company, the rumoured appointment of former Fairfax Digital boss Jack Matthews to the newly-created role of Metro CEO role been disputed, with Matthews believed to be too wedded to the online side of the business to work with the old-media mastheads that would come under his remit.