Radio

Fairfax Media and John Singleton's Macquarie Radio network are very close to finalising a $200 million talkback radio merger, less than a year after talks collapsed in bitter circumstances, Business Day can reveal.

The merger, which is expected to be signed off before Christmas, would create an entity that would own both Macquarie Radio's 2GB, the home of top-rated Sydney shock jocks Alan Jones and Ray Hadley, and Fairfax's top-rated Melbourne station 3AW.

Speculation suggests 2GB would continue to compete side by side with Fairfax's Sydney station 2UE although it is expected that 2GB's sister station 2CH would have to be disposed.

The joint-venture will control leading talkback stations in all the mainland capital cities except Adelaide – a stronger proposition to sell to advertisers – with earnings before interest, tax, depreciation and ­amortisation of $24.3 million.

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Fairfax is expected to emerge with a controlling interest in the merged entity and industry speculation suggests that savings will be sought in advertising sales and in newsrooms.

It is believed that Macquarie Radio's executive chairman Russell Tate would retain the role at the merged entity with Fairfax radio chief Adam Lang taking a very senior position and a succession plan in place.

As revealed by Fairfax Media, the last talks between the two sides collapsed in February over a row over ensuring Macquarie's star presenters Mr Jones and Mr Hadley would be part of the deal.

The fallout triggered a robust exchange of words between both sides. Fairfax chairman Roger Corbett was attacked in the press by Mr Singleton. However, the advertising mogul has since said his comments were "stupid".

Talks have resumed in the past four months led by Mr Tate and Fairfax chief executive Greg Hywood.

In August Mr Hywood indicated that talks could re-open after admitting that Fairfax Radio, its former star division, had delivered a "disappointing" result. Its underlying earnings before interest, tax, depreciation and amortisation (ebitda) fell 26 per cent to $13.9 million on revenues 6 per cent lower at $104 million.

Macquarie Radio's full-year ebitda fell 27 per cent to $10.4 million in 2014 as a result of disappointing operating revenues and "one-off net revenues" of $3.1 million in the prior year.

Analysts see compelling logic for a tie-up. Macquarie's 2GB dominates talkback in Sydney, where Fairfax's 2UE is weak, but Fairfax's radio stations are better rated elsewhere, led by 3AW but also including Brisbane's 4BC and Perth's 6PR.

Earlier this month Mr Jones re-signed with 2GB until 2017, giving another boost to the on-off talks, which had failed one before before February's collapse.

Fairfax and Macquarie Radio declined to comment.