The deal did however pave the way for Catalano to buy Fairfax’s regional newspaper arm Australian Community Media for $125 million. He was backed by billionaire investor and friend Alex Waislitz.
He has had control of ACM for more than three months. Many observers believe it is not performing strongly – a safe bet given most regional media companies are struggling to overcome audience shifts to digital platforms and a soft advertising market.
But what does Catalano do next?
There’s no escaping what Catalano said one month ago when he sat on stage and described his own industry as being in a crisis.
Regional news organisations, he told a crowd of industry professionals at an annual publishing event in Sydney, need to push the government to abolish the one-to-a-market rule for television and remove TV licence fees.
The suggestion was particularly surprising because ACM does not have television interests. At least, not yet. His comments clearly indicate his interest in a bigger media merger that would see his regional newspapers coupled with a television broadcaster and, potentially, another media business as well.
Achieving scale at a time when Facebook and Google dominate advertising budgets has become a focus of almost every media executive in Australia. Catalano is no different.
His frustration with the Prime and Seven deal is a clear sign he sees a benefit in aligning with a TV network. Unfortunately, anchoring ACM to another television network could prove tricky at a time when all broadcasters have had a rough year in terms of advertising revenue.
Southern Cross Austereo’s trading update on Tuesday about the difficulties in the ad market caused the radio and TV company’s share price to drop about 24 per cent, and Bermuda-based billionaire Bruce Gordon’s WIN TV shut down five newsrooms in July amid earnings pressure. It’s possible these results could spook the man who is known more for his booming real estate classifieds success than his traditional media prowess.
But it’s not his only option. Rupert Murdoch’s News Corp could provide an alternative avenue, such as through a deal with its own regional newspaper business. Yet while on the surface it might seem like a quick way to kill off a rival and get a stranglehold on his major markets, News Corp’s regional outfit has little competitive cross-over with ACM’s news titles and very few media businesses are looking to grow their print exposure in 2019.
Catalano may instead look to do quicker deals that have an immediate impact to the bottom line. Among these could be a printing deal with News Corp to reduce costs. This natural extension to the agreement between Fairfax Media and News Corp in July 2018, could offer significant savings at a time when publishers of all stripes need to cut expenses.
Another option he is likely to explore is real estate. Catalano’s long history with Domain, and his recent property technology venture The Today Business, shows he hasn’t forgotten that real estate is still lucrative. In regional areas there’s more reliance on print for classified real estate ads, and a big opportunity to update ACM’s digital offering. It would be surprising if the Cat didn’t use his expertise to exploit this opportunity.
There’s also the possibility that he launches, or partners with, a property portal. Sources close to Catalano said that, ahead of the ACM deal, he registered the name of a new property website. Other sources believe a real estate tie-up with Seven, potentially creating a third listings portal, could be a possibility.
The jury is still out on whether he thinks there’s actually an opportunity to fight against News Corp’s well-resourced REA Group and Nine’s second-place Domain, though.
Now, with so many options on the table, the question is whether this Cat will catch his mouse or be left chasing his tail.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.
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