KEY POINTS:
Fairfax Media is looking at CanWest Media radio assets, including More FM and RadioLive.
It is among more than 20 media companies and private equity firms to express interest during a CanWest Global Communications review of its South Pacific investments.
CanWest has a 56 per cent economic interest in Network Ten in Australia and 70 per cent of CanWest MediaWorks New Zealand.
The New Zealand operation owns TV3 and C4.
It also has 140 radio frequencies including six radio networks - Radio Live, Kiwi, Solid Gold, Radio Pacific, The Edge and The Rock.
Fairfax interest in CanWest radio goes far beyond a passing fancy but there is a snag. Industry insiders say Fairfax is interested in radio - but not television.
CanWest has set up separate sales processes for the Australian and New Zealand assets so that whoever buys Ten will not have to buy the assets here. Australian sources say CanWest will be less inclined to split its radio and television in New Zealand.
Fairfax New Zealand CEO Joan Withers has dismissed the speculation but it is understood work is under way to overcome the barrier.
Catching up in Auckland
Buying CanWest radio would make good strategic sense for Fairfax here as it competes for retail advertising revenue with APN News & Media, publisher of the Herald.
Duopolies are attractive targets for acquisition and CanWest radio assets account for about half of the commercial radio stations here.
The other half of the radio sector is controlled by the Radio Network, whose brands include Newstalk ZB, Classic Hits and Radio Sport.
TRN is owned by ARN, which is a joint venture between APN News & Media and the US radio giant, Clear Channel Communications.
Fairfax and APN also have similar shares of the newspaper duopoly.
In magazines, Fairfax's stable includes Cuisine and House & Garden while APN's includes The Listener and New Zealand Woman's Weekly.
The other big player in magazines, James Packer's ACP Magazines, recently announced a new online association for classified advertising with APN.
Significantly, Fairfax's share of newspaper readership and, hence, retail advertising is under-represented in Auckland.
The purchase of CanWest radio stations would give it an instant boost in this country's biggest city and allow it to challenge APN's focus in three media categories - newspapers, magazines and radio.
Fairfax Bigger, Bolder
The CanWest review is linked to the changing Australian media ownership rules, which have boosted share prices and created a frenzy of activity across the Tasman.
With local media largely owned by Australia companies that activity is having an impact here.
Six months ago, many business journalists and analysts were speculating that Fairfax, with a wide open share register, was ripe for the picking.
But the merger with John Fairfax & Co means it is less vulnerable and will be able to be expansive rather than defensive.
CanWest MediaWorks NZ has a market capitalisation of $530 million incorporating the radio and TV assets.
And that is with the share price propped up by expectations of a takeover offer. So even if there is no split, it is affordable.
Maybe one option will be to buy both asset types then onsell television at a later date.
Fairfax's Sydney-based chief, David Kirk, has made it clear he does not want to buy free-to-air TV.
But TV3 makes a good profit and would not be an onerous addition to the Fairfax stable.
Overall, CanWest is run efficiently and leanly. The closest thing to lavish spending would be on John Campbell's business suits.
It is understood that Australian media magnate Kerry Stokes' Seven Network has been interested in TV3. Stokes has an interest in the website Yahoo7, which recently took over from MSN as Telecom's partner running the Xtra website.
An important task for the acquirer of CanWest assets will be to secure the management team, especially CEO Brent Impey.
Living In Interesting Times
These are indeed interesting times for the local media sector.
Dublin-based publisher Independent News & Media, controlled by Sir Anthony O'Reilly, is part of a consortium offering to buy out APN.
INM has 41 per cent but O'Reilly and a consortium of private equity companies are proposing to privatise the company.
Under the privatisation, debt would be increased from A$600 million ($678 million) to A$2.3 billion.
INM would retain a stake of around 40 per cent while taking out money to invest in the Northern Hemisphere.
Separate from that play, APN's partner in its radio interests is being privatised in the US.
Clear is divesting some of its radio stations but the future of overseas investments, including those with APN in Australasia, remains anything but clear.
Try Your Luck
It is intriguing the New Zealand Lotteries Commission has included Colenso BBDO on the list of agencies being considered for its advertising account.
Ponsonby-based Colenso has the credentials and is now well and truly out of the doldrums of two years ago when it lost the BNZ account to Y&R Advertising.
But ad agencies know the details of the company's marketing strategies, which is why they are restricted from holding the accounts for competing brands.
During the last review of the Lotteries Commission account three years ago, Colenso BBDO was not considered due - according to industry folklore - to it holding the advertising for another gambling account, SkyCity.
A competing agency suggested the relationship between Colenso BBDO and SkyCity had not always been cheerful - something creative director Richard Maddocks would not comment on.
Would Colenso drop SkyCity if it won the high-profile and prestigious Lotteries account?
... And Nothing But The Truth
The new owners of Truth are playing down rumours the tabloid will be making a big push into the automotive market.
The former Fairfax Media title's first issue, out of new offices in Auckland's Khyber Pass, will make an appearance on February 22.
Media industry insiders suggest the paper will be looking into the performance car market and easing away from its focus on advertising for prostitutes and porn.
Co-owner Dermott Malley said the focus for the first issue was on improving editorial content and the company had hired Qantas Media Award-winning journalists to deliver that.
He expected the new Truth would be noticeably different but did not intend to shut out the existing advertiser base.
He acknowledged that prior to his company's interest, discussions had taken place between Fairfax and potential buyers in the sex industry. But the new owners, who include Auckland property developer John Pin and Horton Media, did not want to go down that road - preferring to see the circulation grow from its present 12,546.
