By Adam Coleman
SYDNEY: The Gerry Harvey backed, renegade radio network WorldAudio, has been placed into administration after failing to attract listeners and advertisers.
Prior to going into administration, WorldAudio churned through its initial $6.5 million float in 2002, as well as another $8 million raised by the Harvey Norman chairman in 2004 – $1.5 million of which was his own money.
The company was dealt a terrible blow in October last year, when Federal Communications Minister, Helen Coonan, gave mainstream radio companies exclusive access to digital licenses for six years.
Those mainstream radio companies include broadcasters represented by national industry body, Commercial Radio Australia, which fiercely opposed WorldAudio and is now in the process of a $400 million rollout of a digital radio network across Australia.
After buying a bunch of cheap low-powered AM licences across Australia, WorldAudio attempted to align itself with the large commercial operators with in some cases multi-million dollar licences, when the time came for the Government to grant digital licences.
WorldAudio was counting on the federal Government to allow all radio stations to convert to digital, not only those on the official bands, a move that would have made its signals as strong as its rivals, but the strategy backfired.
The company called in the administrator Robert Elliott from Hall Chadwick this week, after it failed to report its half year earnings and attract any further funds, despite raising $895,000 from individual investors just last month.
The administrators said the company has enough money to continue trading for the next four weeks, but unless it can find an investor, the business will be put up for sale.
Harvey bought into the company early in February 2004, purchasing 10 million shares of the fledging radio operator at 15 cents a share. He now holds around 11.2 million or 4.96 per cent of the company.
When speaking to The Age newspaper yesterday, Harvey was lighthearted about the situation.
“I have to say 95 per cent of what I buy made money and 5 per cent didn’t. If you go back X number of years, I’m way in front. But I just don’t like losing,” he said.
“I’m just glad it wasn’t a racehorse, because that would have hurt like buggery.”