Macquarie Media earnings fall on legal claims, weak ad market

Macquarie Media’s earnings have been hit hard by costs relating to legal claims, impairment charges and a tough radio ad market.

Nine Entertainment-backed radio network Macquarie Media has been hit hard by costs relating to legal claims, impairment charges for its Perth operation, as well as a tough radio advertising market in its full-year earnings.

The company, which owns stations 2GB, 3AW, 4BC and 6PR, posted an underlying net profit of $14. 4 million for the year to June 30, down 18.7 per cent from the previous year’s $21.5m.

Earnings for the financial year also fell by more than 3 per cent to $131.8m, while net debt increased 28 per cent to $22m.

Macquarie Media, which is 54.5 per cent owned by Nine, reported revenue of $131.8m for the year, while net profit was at $7.6m.

The business said the statutory results were impacted by $4.8m in legal claims as well as a $3.6m impairment for the Perth business, and almost $1m in costs relating to redundancies.

In September last year, Alan Jones, 2GB and 4BC were ordered to pay more than $3.4m in damages, plus interest, for defaming Queensland’s Wagner family.

The Australian understands these costs are accounted for in the legal claims.

Macquarie chief executive Adam Lang said in a statement that while the results were in line with May guidance, the outcome was “disappointing” for shareholders.

May’s profit downgrade reported earnings would be 10 per cent lower than originally forecast, due to difficult advertising market conditions.

“The Macquarie Media ­strategy is to leverage our market leading audience into a greater financial return,” Mr Lang said.

According to figures released by Commercial Radio Australia, revenue from metropolitan commercial radio totalled $800.77m for the last financial year, down from the previous year’s record $804.94m.

Data released by Credit ­Suisse shows Macquarie Media takes up the smallest percentage of commercial revenue share in radio, behind Southern Cross Austereo, Australian Radio ­Network and Nova Entertainment.

The financial results follow months of internal disruption at Macquarie Media over the re-signing of breakfast host Jones, bullying allegations against Ray Hadley, and the departure of afternoon host Chris Smith.

Nine boss Hugh Marks has previously said he wanted to complete the full takeover of the Macquarie asset, but recently indicated a desire to postpone the acquisition. He told the Nine-owned Sydney Morning Herald a takeover would “depend on what the business looks like, its profitability, its viability and what a deal might look like”.

Nine declined to make further comment on the matter.