PERTH’S newest commercial radio station will be put up for auction on February 14.
The Valentine’s Day auction is expected to result in a fierce battle, with bids thought to exceed the $1 million reserve price.
The hot favourite for the auction is DMG Radio, which has picked up commercial licences in both Sydney and Melbourne in the past 12 months.
Neither of the major commercial radio station owners in Perth will be able to bid for the commercial licence due to media ownership laws that prevent any company from owning more than two commercial licences in any one market.
The auction for a commercial service in 93.7 on the FM band has not elicited any joy from Southern Cross or Austereo, the major commercial licence holders in Perth.
There has not been a commercial radio licence auction in Perth since 1980, when Southern Cross outbid all rivals to establish 96FM.
Not surprisingly, the imminent arrival of a new commercial station is not being greeted with much enthusiasm by either of the major operators.
96FM general manager Shane Healy conceded there was some space in the market for a new player.
“There are sectors of the music market where there are opportunities for a new player,” Mr Healy said.
Mix 94.5 managing director Gary Roberts said DMG was expected to be the successful bidder.
“They’ve got the deepest pockets and it suggests they’re going to be pretty aggressive in their bid,” he said.
When Nova 100 went to air in Melbourne in December 2001, it was the first new commercial radio station in that1 city for 21 years.
And with the hype came a new format. Nova promises only four minutes of advertising an hour, less than half the advertising time on other commercial stations. Nova claims advertising clients get the opportunity to own a solo break or, at worst, share the spot with one other advertiser.
DMG paid $155 million for the new wide commercial licence. At the time of the successful bid, DMG chief executive officer Paul Thompson claimed the new licence would inject much-needed competition into the Sydney market.
If DMG successfully bids for the Perth licence, it will be the 62nd commercial licence the company has picked up in less than seven years.
In late December 2000, Mr Thompson said he hoped DMG would eventually become the leading operator in Australia.
The auction is decided by the highest bid, although this format has been criticised by a number of industry players.
