Holleran ‘we’ll use radio to grow TV’

The Australian has reported today that Southern Cross Austereo is bundling advertising packages at aggressive rates across its radio and television properties to generate cash.

The article speculates that the SCA debt covenants are looming as an issue, amid growing frustration at the poor programming being delivered from Network TEN to the Southern Cross Ten regional network.

SCA CEO Rhys Holleran has said that the company is leveraging off the strength of radio to attempt to grow television share, commenting; "Our strategy isn't bundling, but locally using radio to drive a better TV share."

SCA has an output deal with Network Ten which it had reportedly hoped to exit from, and merge with Channel Nine, and the forming of a new media supergroup. Whilst SCA's regional radio properties do very well, the television performance given the TEN output has been weak.

With the media law changes failing to get through parliament, and not appearing likely any time soon, any potential merger with Channel Nine, and a subsequent reshaping of regional television would seem off the table for now.

The output deal with TEN expires on 30 June, and whilst SCA does not necessarily need to ink a new deal by then, the output fees will increase by 25% should it move to a rolling relationship rather than a new contract.

SCA shares are down slightly at lunchtime on the ASX at $1.46 per share.