In an act of faith, John Singleton’s Macquarie Radio Network will take 3.3 million shares in the faltering wireless broadband group, Unwired, as payment for the first year of a three-year sponsorship of Alan Jones’s top rating breakfast radio program in Sydney – the announcement is here.
At Thursday’s closing price of 40c, it values the first year of the sponsorship at $1.32 million, a bit more than the $1.2 million Telstra had been paying to sponsor Jones’s show. That deal ended on 30 June, but Telstra was still listed as the sponsor on the 2GB website this morning, 15 days later.
Unwired has been burning cash building its wireless networks, but is confident it has enough money to continue. As a vote of confidence in the group, the Allco financial services group recently lent Unwired $15.7 million for a spectrum deal.
More shares and cash, not specified in the announcement on Thursday, will be issued to MRN in the second and third years of the sponsorship. But there was no detail about how long Macquarie would have to hold the shares before it could sell them.
The shares and cash will not go to Jones directly: MRN will receive it, but Jones will get some benefit through his ownership of 14% of MRN’s capital tied up in an options deal.
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