Fairfax Media and smaller rival Macquarie Radio Network are in talks about a potential merger that would create a national radio network with more than $150 million in annual revenue.
Two years after talks between the two companies broke down, Fairfax and Macquarie are believed to be in preliminary discussions about forming a venture in which Fairfax would retain management control and a majority stake.
Fairfax Media, the publisher of BusinessDay, operates seven metropolitan radio licences across Australia, including 3AW in Melbourne and Sydney's 2UE. These assets reported $105.1 million total revenue for 2013, up 8.1 per cent, and were recently valued by investment bank Morgan Stanley at between $167 million and $297 million.
Macquarie Radio operates two Sydney metropolitan AM radio stations, 2GB 873 - home to shock jocks Alan Jones and Ray Hadley - and 2CH 1170. It also owns eight stations based in regional Queensland, and a public relations agency. It reported revenue down 10 per cent to $57 million for the year to June.
Macquarie Radio's shareholders include advertising man John Singleton and prominent investor Mark Carnegie, who together own a small stake in Fairfax.
Fairfax Media's largest shareholder, mining billionaire Gina Rinehart, has previously called for Fairfax to sell its radio assets.
Macquarie Radio is believed to have offered between $200 million and $250 million for Fairfax's radio assets in 2011.
Its recent annual report revealed a suspension of advertisements on Jones' radio program - sparked by offensive comments about the father of former prime minister Julia Gillard - led to a $3 million to $4 million hit in revenue.
"We were also disappointed in the first half of the year by the revenues generated from our London Olympic broadcasts, and a Sydney radio market which failed to regain any real momentum in the second half of the year despite strong growth in other markets," Macquarie Radio said in an annual report released last month.