Waislitz’s plan for ACM

Billionaire investor Alex Waislitz thinks there’s more money to be made from ‘sunset industries’.

Billionaire investor Alex Waislitz. Picture: David Geraghty.

Billionaire investor Alex Waislitz thinks there’s more money to be made from “sunset industries”: it’s the main reason he and former Domain chief Antony Catalano backed a $125 million acquisition of Nine’s regional arm, Australia Community Media, earlier this month.

Mr Waislitz, chair of the Thorney Opportunities Fund, told The Australian one of the first priorities once settlement of the deal was reached would be building out the content in the publications, and the way they were distributed.

“We haven't really focused on wages or cost cuttings or anything along those lines,” he told The Australian. “Antony is a journalist himself, so he appreciates the integrity of journalism and the need for good-quality content.

“People everywhere want to know what's going on globally in wider Australia, but I believe they're equally as interested, if not more, about what is happening in their specific part of the world, in their community. I don’t think that will go away and how you present that, and in what form to reach out with them, based around modern technology, is the challenge for us.”

While he wouldn’t go into detail on the size of investment he would make in content, Mr Waislitz said the ACM business, sold to Nine last year as part of a $4 billion dollar merger with Fairfax Media, had been “starved of capital”.

At the time of the merger, Mr Waislitz voted against the Nine merger, describing the offering price as too low, later backing a last-minute bid by Mr Catalano to acquire the Nine business. The 11th-hour bid was rejected by then chairman Nick Falloon, who said Mr Catalano’s letter did not contain an “actual proposal” that could be considered as an alternative for shareholders.

But as a former major shareholder of Fairfax Media, Mr Waislitz had the benefit of looking at Fairfax Media’s assets, including Australian Community Media.

“It still reaches a vast percentage of the Australian population — close to 9 million people have exposure to these publications in one form or another — and I believe that the money that was generated by that division really wasn't allocated back to them to spend and improve and expand and digitise some of their operations,” he said. “The money was actually sort of funnelled back up to the head company, which allocated it to other opportunities.

“We think it is a division that's been starved for capital, hasn't had the chance to innovate and change a lot, but it's still a powerful reach across the country.”

Advertising revenue will still be a major driver of revenue, but Mr Waislitz suggests the way that is packaged could be different. While Nine had previously noted the ACM business didn’t tap into the national advertising reach strategy, Mr Waislitz argues regional communities should be afforded the same opportunities. He said there was a broader real estate play, similar to that exploited by Domain in metro areas, by tapping into how those in rural areas got access to quality data about real estate. “Clearly that's a specialty field of his (Catalano), and he has terrific network and understanding about the trends in that area. As we know the biggest individual asset class for Australians is their home, so that information is going to be sought after,” he said.

“If he can present that information in a valuable way to customers, they'll engage with us. There'll be something along those lines that will develop in due course.”

Like Mr Catalano, Mr Waislitz hasn’t ruled out the potential of an acquisition of News Corp’s regional and local business, which includes approximately 60 publications. News Corp, owner of The Australian, acquired the regional and local titles from APN News & Media in 2016 for $37m.

“The history of Thorney is to grow and expand businesses, and Catalano's history is also growth and expansion, so it makes sense that down the line once we've bedded this down, that we would look at other opportunities to expand and grow the organisation. But there’s no rush. We’re not ruling anything out, but we have no plans about that. Certainly at this point of time, we’ve got to complete the transaction and we’ve got to set up the business for the future.’’