• Contribute

• News items & movement radionews@radionews.com.au

• Send us your press release press@radionews.com.au

• Via our News Bank no email needed News Bank

Fierce bidding by seven companies is expected to push the price of the new Brisbane FM radio licence above $100 million at the Australian Broadcasting Authority's auction tomorrow.

Fresh from paying $106 million for a new licence in Sydney on Thursday last week, the British-owned DMG Radio Australia - which runs the Nova network - is expected to bid aggressively.

It will be competing against the joint venture between John Singleton's Macquarie Radio Network and Richard Branson's Virgin Group, which lost the auction of the Sydney licence by $1 million.

The other companies registered to bid for the Brisbane licence are APN News & Media's Australian Radio Network, Hot Tomato, Reg Grundy's RG Capital Radio, Rural Press and the law firm Holding Redlich, which is acting for an unknown party.

In 2001, DMG and ARN paid $67 million for a licence in Brisbane that was used to set up 97.3 FM, which is jointly owned by the two companies but managed by ARN. (They also jointly own Nova Perth, which is run by DMG.)

Before the Sydney licence auction, Michael Anderson, chief executive of Austereo Group, Australia's biggest FM radio operator, predicted the Brisbane licence would sell for between $80million and $100 million.

DMG's higher than expected bid in Sydney has prompted analysts and radio industry executives to revise their forecasts of how much the Brisbane licence will fetch, with many now tipping $100 million or higher.

The Brisbane radio market generated ad revenue of $62 million in 2002-03. It grew 2.7 per cent in 2002-03, the slowest growth rate of the five mainland capital-city markets surveyed by PricewaterhouseCoopers.

But so far this year, Brisbane is the fastest-growing market, with ad revenue up 17.1 per cent to $54.5 million in the nine months to March 31, compared with an average increase of 10.3 per cent across the five cities.

APN chief executive Brendan Hopkins said any company that paid $100 million for the Brisbane licence would never see a return. "Even if the market doubles over the next three years, it's still not worth paying those sorts of dollars," he said.

But DMG wants the Brisbane licence to make Nova a national network and boost its appeal to national advertisers. Both RG Capital and Rural Press are keen to add Brisbane to their regional Queensland networks.

Hot Tomato has spent $30 million establishing a station on the Gold Coast. Its owners, Anna Mann (a former wife of Rupert Murdoch) and her brothers Hans and Jaan Torv, want a Brisbane station to achieve economies of scale.

For the Macquarie-Virgin joint venture, securing the Brisbane licence would be the first step in launching the Virgin radio brand in Australia.

Although it failed to buy the Sydney licence, the joint venture was still planning to invest in the FM radio sector, Mr Singleton said.