Lachlan Murdoch Expands Australian Media Portfolio by Taking Full Control of DMG Radio
The son of News Corp. CEO Rupert Murdoch now controls the number two FM radio network in the country and is seen as less likely to expand his role at the conglomerate.
SYDNEY - Lachlan Murdoch has confirmed that he has acquired the 50 percent of commercial radio company DMG Radio Australia (DMGRA) that he didn’t already own from British media group Daily Mail and General Trust.
He made the deal, which further expands his media holdings, through his private investment company Illyria Ltd.
It’s a move which, according to local reports, means that Rupert Murdoch’s eldest son is unlikely to increase his day-to-day involvement at News Corp., as has been at times speculated since the phone hacking scandal in the U.K., although Lachlan Murdoch remains a non-executive director of the company.
Murdoch reportedly paid AUS$100 million ($97 million) for the other half of the company, which owns and operates national youth FM radio network Nova and easy listening station Smooth FM.
Daily Mail and General Trust will also receive a further sum equivalent to 50 percent of DMG’s final dividend for the financial year ending Sept. 30, 2012.
Murdoch first bought into DMGRA in 2009, paying $108 million for 50 percent of the group then.
In a statement Murdoch said: “When we acquired our 50 percent interest in DMGRA in Nov. 2009 we set out to create one of Australia’s leading media companies. Over the past three years, working alongside DMGRA’s wonderful staff, we have successfully implemented our growth strategy.”
He added: “In that time, Nova has regained its position as the number one national network for people 18-39, and we have successfully launched Smooth FM. The [operating cash flow] of DMG has doubled and the IRR [internal rate of return] on our initial investment is more than 60 percent."
Concluded Murdoch: “We have great confidence in the continuing potential of radio, great confidence in the management team we have built under Cathy O’Connor, and look forward to further growing DMGRA in the coming years.”
Illyria is also a 9 percent shareholder in struggling TV broadcaster Ten Group Holdings, and Murdoch remains chairman there after acting as CEO of Ten for the majority of 2011.
Illyria paid $128 million for its stake in Ten in November 2010. Since then, shares in Ten have lost more than 70 percent and plummeting ratings and revenues this year in a difficult ad market saw the departure of chief programming officer David Mott last week after sixteen years with the company.