ACM buyer Catalano likes regional media's growth prospects

The former chief executive of the Domain online real estate platform has teamed up with Melbourne billionaire, Alex Waislitz's Thorney Investment Group, to initially pay Nine Entertainment $115 million for ACM's 170 newspapers and magazines, plus another $10m in 2020.

Mr Catalano and Thorney will each own 50pc of ACM, and may also change its name when the sale is finalised in late June.

He is likely to be executive chairman of the company.

ACM includes rural news websites and mastheads such as Farmonline, The Land, Queensland Country Life, Stock and Land, Stock Journal, Farm Weekly, Good Fruit and Vegetables, The North Queensland Register and Dairyfarmer, plus a host of regional daily publications and non-daily community newspapers.

Its rural events division runs agricultural field days including AgQuip in northern NSW and the CRT Farmfest Field Days in Queensland.

Much of ACM's regional footprint, including newspapers such as The Canberra Times, The Examiner in Tasmania and The Courier in Ballarat, Victoria, was established by Rural Press in the 1980s and 1990s before it merged with Fairfax Media in 2007.

Late last year the Fairfax empire merged again, with Nine, which immediately opted to concentrate on metropolitan markets rather than retain local newspapers, including ACM's suburban mastheads in Sydney.

Mr Catalano has identified seven of ACM's larger papers, including The Canberra Times, Newcastle Herald and Border Mail at Albury, as key players in the company given the big populations they served made them valuable assets.

"I've always been fascinated by the size of the audience of those publications," he said.

"It's an opportunity to generate significant revenue.

"Media sells on audience. It sells papers and it sells advertising based on the audience size and the quality of those publications.

"I think we can beef that up and invest. I'm going to continue to do that pretty aggressively.

"From my perspective, there's certainly what I would call regional city assets in there, and the rest of them are obviously very good hyper-local content players."

When asked about the future of the dozens of smaller ACM publications across Australia, Mr Catalano said this week: "The question now is to look at all of the options open to us to make this a bigger and better business, and not a shrinking business.

"And that's in the context of a category that is facing structural headwinds. It has for many years."

ACM's regional portfolio spans most regional newspapers in NSW, including The Maitland Mercury and The Armidale Express - two of the nation's oldest mastheads - plus well established Victorian names such as the Wimmera Times-Mail and Bendigo Advertiser; South Australia's Port Lincoln Times and Murray Valley Standard; West Australia's Bunbury Mail and Collie Mail; Queensland's Beaudesert Times and the North West Star at Mt Isa, and The Katherine Times in the Northern Territory.

Mr Catalano, who worked for 26 years at Fairfax over two stints, said he had expressed an interest in buying ACM "immediately after" the Nine merger.

"I haven't invested in this business with a view to going in there and stripping it bare and closing it down. That's not the intent," he said.

"The intent is to buy a business that I think has some value in it.

"What protects it against downside is the variety of income streams. There's currently printing, advertising revenue and circulation subscription revenue.

"Finding new ways of generating revenue are all the things we will look to explore.

"My experience in the past is to protect jobs.

"I've got a history of hiring, not firing.

"I want to grow the business, not shrink it to greatness. Not my style."

Mr Catalano had a colourful history with Fairfax.

He was property editor and marketing director at The Age but was made redundant in 2008.

He then founded The Weekly Review, a free property magazine which started winning business from The Age.

He sold half the business to Fairfax for $35 million in 2011, became Domain chief executive in 2013 then left the company in early 2018 soon after it was listed on the Australian Securities Exchange.

He said ACM papers would continue to be printed under press-sharing deals struck last year between what was then Fairfax and publishing rival News Corp.

"We'll carry those through.

"That's an area that will continue to be reviewed and consolidated, but, obviously, if there are less publications, there's less need for print centres, so I think you'll continue to see some consolidation of print centres for them to remain viable."

Larger ACM newspapers would continue to publish Domain magazines, locking in a key revenue stream for those businesses.

Nine owns 59 per cent of Domain.

The new owners paid Nine $115 million in cash and $10 million in advertising for ACM, beating out rival bids from equity firms Allegro Funds and Anchorage Capital Partners.

Asked about editorial independence, a key issue for journalists and their union when Fairfax merged with Nine, Mr Catalano said: "There's simply no merit in content that doesn't resonate with the audience, and it doesn't resonate if it doesn't have authenticity and credibility."

The Media, Entertainment and Arts Alliance welcomed Mr Catalano's comments about investing in the larger papers but was concerned this could come at the expense of smaller mastheads being closed.

"There are about 650 editorial staff employed across the country by the ACM group," MEAA media director Katelin McInerney said.

"It is essential the individual audiences for each of the group's mastheads be respected."

She warned Mr Catalano had been responsible for editorial cutbacks in previous publishing ventures.

"Genuine local reporting was gradually whittled away in favour of bland, vanilla news stories shared across several mastheads, regardless of what individual audiences wanted," she said.

"You can't do that with regional newspapers.

"The ACM mastheads are supported by fiercely loyal readers.

"The newspapers must continue to provide local news, information and entertainment to the communities they serve. Their readers are entitled to have local editorial content, not homogenised news generated from somewhere else."