More cost cuts likely as Nine pursues full control of Macquarie Media
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More cost cuts likely as Nine pursues full control of Macquarie Media

Nine Entertainment Co chief executive Hugh Marks is expected to further cut costs if he gains full control of Macquarie Media, after telling shareholders the media group had begun discussions with the radio network over a deal.

Nine and Fairfax Media will start trading together on the Australian Stock Exchange next week, after an historic takeover of the publisher (owner of The Sydney Morning Herald and The Age).

The merger includes Fairfax's 54.5 per cent stake in radio network Macquarie Media, full ownership of subscription video platform Stan and 59 per cent of real estate listings portal Domain.

Macquarie Media's 2GB host Alan Jones.

Macquarie Media's 2GB host Alan Jones.Credit:Linda Morris

Nine informed the ASX on Wednesday morning it had begun “some preliminary discussions regarding the outstanding shares" in Macquarie Media, following media speculation about a potential acquisition.  Macquarie Media is the owner of talkback stations 2GB and 3AW.

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"Nine will make a further announcement should these discussions progress to a transaction," the announcement said.

Advertising tycoon John Singleton, who has a 32 per cent stake in the company, is understood to have already discussed pricing with Nine.

The merger between Fairfax and Nine is estimated to reap annualised savings of $50 million within two years. These include $15 million from streamlining technology and product, $15 million from media sales including job losses, $15 million from corporate functions such as head office costs, and $5 million from mainly lifestyle content.

The group would be able to make more savings if it owned 100 per cent of Macquarie with speculation the broadcast newsrooms could be merged. This would include radio and television staff. Nine has repeatedly said print and online newsrooms would not be changed.

Owning 100 per cent of Macquarie Media could also enable Nine to employ staff who work across both businesses on single contracts. Nine Network business and finance editor Ross Greenwood hosts Money News on 2GB.

There has also been heightened discussion about the future of 2GB's controversial high-profile broadcaster Alan Jones, whose contract is up for renewal in June next year. 

Industry sources are expecting the media business will look to sell Fairfax's regional and rural newspaper arm Australian Community Media (ACM) to focus on parts of the business with substantial reach. The Canberra Times is part of the ACM division.

Macquarie Media chief executive Adam Lang declined to comment.

Macquarie Media's share price jumped 12.57 per cent to $2.06 on Wednesday, while Nine's share price was down 7.95 per cent to $1.62.

Jennifer Duke writes about media and telecommunications.

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