Media agencies are upbeat on Australia’s Sports Entertainment Group (SEG) acquiring New Zealand’s MediaWorks.
But they warn about replacing local NZ programming with syndicated streams from Australia.
The ASX-listed Australian multi-platform sports media, content and entertainment company is acquiring the New Zealand audio network for $NZ130 million (AUD107.4 million).
The deal creates a trans-Tasman audio, digital and entertainment group with combined weekly audiences of more than 5 million listeners across Australia and New Zealand.
Kwan Ng, chief operating officer, KINGST, said the shift to SEG could bring commercial benefits across the board.
“Advertisers get access to content sponsorships built on sporting rights and talent, while agencies may gain better negotiating power and easier cross-Tasman campaign support,” she said.
“At the same time, local publishers face tougher competition, which gives the broader radio market a solid boost of confidence.
“However, there is a real risk of losing listeners if popular local Kiwi hosts get replaced by syndicated Australian sports shows.
“In other words, please don’t Aussie my Kiwi radio, if SEN tries to replace local kiwi banter with sports syndication, listeners might hit the tuning dial faster than a flying pavlova.”
Grant Maxwell, founder, EightyOne Media, said the obvious question is why, after exiting New Zealand through the divestment of SENZ to focus on the Australian market, SEG has decided to return.
“The assumption is that owning the market leader in radio is a very different proposition to owning a minnow,” he said.
“The scale of the MediaWorks business should give SEG a much stronger platform to secure sports broadcasting rights and generate a return on that investment more quickly.
"MediaWorks has little presence in sports coverage and has largely stepped away from talk radio in recent years to focus on music formats, which makes it a natural complement to SEG's strengths in those areas.
“Add to that the prevalence of trans-Tasman sporting competitions – think NRL, men's and women's football, basketball, rugby and more – and SEG could have a compelling proposition when those rights next come up. That should also strengthen its offering to advertisers and sponsors on both sides of the Tasman.”
He said MediaWorks' AM/FM broadcast footprint will also be highly attractive to SEG. New Zealand's topography makes broadcast frequencies both scarce and expensive to secure.
“That's part of the reason SENZ struggled – it's difficult to build a national network relying on digital distribution and the occasional AM signal,” he said.
“On the face of it, this may appear to be a U-turn for SEG, but looking beneath the surface, it feels more like a classic case of lessons learned: if you can't build the network, buy it.
“Overall, this appears to be good news for advertisers and MediaWorks staff alike. The only group that may have reason to be concerned is the current owner of Sport Nation (formerly SENZ), the TAB.
“Time will tell whether those concerns are justified, or whether SEG chooses not to re-enter the sports talk market. The latter seems unlikely.”
Simon Teagle, CEO, Aotearoa Independent Media Agencies (AIMA), said the deal has the potential to reshape the trans-Tasman audio landscape.
“It will no doubt be a relief for our friends at MediaWorks to have an owner with genuine audio pedigree and a clear strategy, after spending the past year in limbo awaiting a sale,” he said.
“SEG is a specialist in sports audio and understands how to build content and platforms that serve the needs of a specific, like-minded audience.
“MediaWorks does much the same in music and entertainment, making the two businesses complementary rather than overlapping. That's a much stronger foundation than a straightforward consolidation play.
“Where it gets interesting is talk. SEG understands talk formats far better than MediaWorks' previous owners did, so we'd expect it to develop products that recapture the audience segment MediaWorks walked away from not long ago.
“Before anyone starts imagining Today FM 2.0, however, SEG first needs to rebuild the sports rights position it relinquished when it sold SENZ to the TAB (now Entain) in 2023. Reacquiring those rights will be its first real test, and it won't be either quick or inexpensive.
“The more speculative opportunity is Rova. We can only speculate, but it seems plausible that SEG will use the platform to establish a foothold in Australia, pursuing the trans-Tasman opportunity outlined in the acquisition announcement.
“Radio is heavily regulated across the Tasman, meaning a brand like The Rock would struggle to exist on traditional Australian airwaves. Through a version of Rova tailored to Australian audiences and advertisers, however, it potentially could.
“If SEG can rebuild a credible sports offering in New Zealand while using Rova to extend MediaWorks' brands into Australia, this acquisition starts to look like the first genuinely trans-Tasman audio platform either market has seen.”
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