Why Today FM is the first canary in the global recession mine
Beyond the madness of launching a ‘balanced’ Talkback Radio station because Mediaworks Management were spooked by a woke lynch mob attacking MagicTalk instigated by David Farrier and The Spinoff, put aside that those pushing for the ‘balanced’ Talkback Radio had no research backing this stupid decision up and ignore the fact the Station plunged to the lowest Talkback ratings in NZ broadcasting history.
Put all that aside, and what Today FMs collapse really tells us is that the global economic recession is about to hit us.
MediaWorks are owned by Oaktree, a US Private Equity firm.
Oaktree bought MediaWorks distressed debt, then bought the remaining stakes off the other investors.
Private Equity firms take on debt themselves to finance their deals.
The investment only works of the thing they buy, e.g. MediaWorks, can generate enough cash to pay the debt repayments.
Interest rates on debt have now gone up so the repayments are higher.
Therefore the asset (MediaWorks) has to generate more cash.
The business model does not allow for Today FM to spend $9 million on reformatting then lose $1 million per year.
Money on the table, not one person from Oaktree ever listened to Today FM, they simply looked at how much money they were haemorrhaging from increased interest costs and slit Today FMs throat without any mercy.
What we are seeing with the demise of Today FM is the impact of those global interest rates increasing and that is not going to stop.
Inflation is increasing, Reserve Banks will continue to lift interest rates and Today Fm is merely the first canary in the global recession mine to die.
Expect far more of this.
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Sounds like a case of: “A fool and his money are soon parted.”
Duncan Garner and Tova O’Brien were touted as ‘BIG Names’ able to pull an audience, turns out (unsurprisingly) the NUMBER “3” on television user’s remote controls was actually the ‘BIG Name’.
As The Daily Blog rightly pointed out, Today FM had some of the lowest ratings in NZ radio history.
I believe Today FM had a whopping 30 stuff to boot and was still out-rated by The Platform which doesn’t even have a radio frequency!
I mean, you can’t make this stuff up. As for Duncan Garner claiming ‘betrayal’.. sounds to me like Today FM’s foolish investors were the ones betrayed and the Media Works board righty pulled the plug.
It will be interesting to see who sinks their money into these two next.
Go Woke, Become a Broke Joke.
Can Stuff be next please.
Oh, I like you! Yes please to that
Really? Martyn I think your analysis of the whole enterprise being rather unlikely to succeed was more on point than this being a canary. It’s a turkey as you well observed. Their revenue from advertising must have been fairly lean.
The Western economies are going to see inflation plus recession
Not a global recession – but ‘We the People’ walking away from endlessly lying media.
So why is 1ZBollocks doing well?
Because it’s not, silly.
You might not like what they say, but they represent the views of a large majority of NZ citizens.
Financed by hard right backers Wheel, just look at its contents and supporters.