Media Man Australia - The Online Home of Greg Tingle

Nova beats Virgin in FM auction - 16th April 2004
(Credit: The Sydney Morning Herald)

Whispering more than sweet nothings, someone on the other end of the mobile phone stuck to Ian Grace's ear bid $105 million for a commercial FM radio licence for Sydney yesterday.

It was not enough. DMG Radio, operator of Nova, forked out $106 million to keep Sir Richard Branson off its turf.

That someone on the end of Grace's phone was probably John Singleton, the advertising executive who had teamed up with the Briton to try to crack Australia's most lucrative radio market.

Grace, a former Singleton executive, was not saying who called the shots. Nor was Bill Spain, the Gilbert & Tobin lawyer who sat beside him and flashed the red cardboard marker as the price edged all the way up from $55 million in single bids.

That's the single million, each wave of the cardboard. "It's certainly more than I bid for my home," deadpanned Spain.

Singleton said he was not on the phone and did not know Grace, chief executive of Virgin Radio Asia, was there. "There was only one guy who needed to be there and that was Spain. The rest had nothing better to do - or they're charging me by the hour."

The sale, conducted on behalf of the Australian Broadcasting Authority by auctioneer Gus Rice, was like a game of rich man's bluff. Paul Thompson, chief executive of DMG, plonked his chips down quickly and confidently.

Rice would then call the bid against Spain 10 or 20 times until the phone bidder authorised another wave of the cardboard on behalf of the odd numbers.

And Thomson would counter with an even - immediately - until the odds fell silent at $106 million.

The veteran radio star Doug Mulray said it was nothing like the old days. When Sydney's first commercial FM licences were issued the operators paid not one cent.

"It was a beauty parade then. There were 13 applicants and Rod Muir got one [Triple M] and Mike Willesee and John Laws got the other [2Day]," he said.

In victory Thompson, who paid $155 million for the Nova licence in 2000, acknowledged a premium was worth paying. He hinted at a format aimed at a more mature audience.

"If they had got the licence and come in and used it as a platform for a national under-40 Virgin network that would have been very damaging for us and that was certainly taken into account when we finalised the amount of money we were prepared to pay."

Virgin, which said it remained committed to establishing an Australian network, must now pay a premium to buy out an existing Sydney operator.

"Not everyone's going to succeed," Singleton said. "There's more and more rats eating less and less cheese. One day there's going to be a rat for sale."

Links:

Official websites

Australian Broadcasting Authority

Articles

Aussies tuned in, by Greg Tingle

Interviews

Doug Mulray

Derryn Hinch