Hutchy’s struggling radio stations hit with interest time bomb

Craig Hutchison’s struggling radio stations will need to find $3m a year as its business loan interest rates skyrocket.

Craig Hutchison at Perth Wildcats game at RAC Arena in January this year. Picture: Getty Images

Craig Hutchison’s struggling media company is set to be hit with a skyrocketing interest rate on its debt time bomb.

The interest bill on the sports reporter’s $28 million Commonwealth Bank debt will double from August next year.

The Commonwealth Bank has the right to call in the total debt at any time, raising concerns about the viability of the business which controls sports radio stations, the Perth Wildcats and the Melbourne Mavericks netball team.

It comes as sources claim a potential buyer has been having meetings with radio identities about moving to SEN if it was sold.

A source with knowledge of one of those meetings but unable to speak publicly confirmed the interest.

“They are up to their eyeballs in it,” a source said.

Hutchison did not respond directly to questions but Sports Entertainment Group released a statement to the Australian Stock Exchange on Wednesday.

The statement said the expiry of the Commonwealth Bank loan was “well understood” by the company’s board.

“SEG is focused on reducing net debt and has several proposals under consideration to achieve this in FY24,” the statement said.

“SEG’s finance facility expires in August 2024. We are in dialogue to extend this facility. We believe a combination of the abovementioned initiatives will assist in this regard.”

The company insisted that all divisions, with the exception of New Zealand, were trading profitably.

SENO owner Craig Hutchison.

The company’s financial struggles have left the Commonwealth Bank exposed to the debt if Sports Entertainment Group collapses.

Sports Entertainment Group was paying 4.71 per cent on the CBA loan, which was signed in 2021 when interest rates were at historic lows.

The Reserve Bank has hiked rates 13 times since May last year, with rates on business loans soaring.

Two senior banking sources, who were unable to speak publicly for commercial reasons, said Sports Entertainment Group’s interest rate would skyrocket.

The interest rate would be at least 12 per cent, one source said, while a second source suggested it could be as high as 15 per cent.

Even at the conservative estimates, Mr Hutchison’s interest bill would double to more than $3 million a year.

Mr Hutchison has taken a pay cut in the latest financial year.

He was paid almost $550,000 in cash but the total value of his package shrank to $295,000 after share options were cancelled because of the company’s dismal performance.

The previous year, his total package, including shares, was worth almost $930,000.

SEG presenter Gerard Whateley.

SEG presenters Garry Lyon and Tim Watson.

Sports Entertainment Group’s share price was trading as high as 41 cents in 2018, but it was hovering around 21 cents on Wednesday.

Hutchison is a major shareholder in Sports Entertainment Group, which was created out of a merger of his former company Crocmedia and the Pacific Star Network which owned the SEN radio station.

John Rothfield, known as Dr Turf, was also a key investor in the company and was an on air presenter at SEN, alongside Richmond legend Kevin Bartlett. Mr Rothfield, who now appears on rival sports network RSN, did not return calls on Wednesday.

Board member Ron Hall, also an investor, hung up when called.

A report in September from auditors BDO warned that there was “material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern.”

“The group may be unable to realise its assets and discharge its liabilities,” the BDO report said.

Sports Entertainment Group has a star studded list of former sportsmen and media identities on its roster including Ian Healy, Tim Paine, Tim Watson, Garry Lyon, and Gerard Whateley.

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Originally published as Hutchy’s struggling radio stations hit with interest time bomb