MACQUARIE Media Group, the dominant player in the nation’s regional radio market, is believed to have put its network of stations up for sale for about $600 million as it seeks new opportunities in the deregulated media market.

The decision to sell after only two years is believed to have been prompted by the federal Government’s insistence on tough local-content requirements for regional radio stations to gain the Nationals’ support in parliament last week for the removal of cross-media and foreign ownership rules.

Those local-content rules would be triggered if the company - a fund set up by Macquarie Bank in 2004 to invest in media assets - bought a TV station or newspaper business in any of the markets in which the radio stations operate. The cost of meeting those requirements would dent earnings growth at Macquarie and limit the appeal of consolidation in the regional media market.

Nationals MPs have constantly criticised Macquarie for its heavily networked approach to news and other programming on its regional radio stations.

Earlier this month, Macquarie came under fire for hubbing some news in Western Australia out of its Gold Coast newsroom.

But it warned it would be forced to close at least 10 stations in towns in Tasmania, Western Australia and Queensland if new content requirements were enacted.

The new rules impose 12 1/2 minutes a day of original local news content and 4 1/2 hours of local live content.

The broadcaster said the costs of hiring extra staff and infrastructure costs would make a further six stations “marginal”.

The most likely buyers are regional media groups with better developed regional newsrooms that could more easily absorb the cost of producing extra local content across two media.

The radio business, Macquarie Regional Radioworks, owns 85 regional radio licences that cover about 60 per cent of regional Australia.

The group, which posted operating earnings last year of $55 million, also faces the cost of upgrading all its radio stations to digital.

Macquarie formed the business in 2004 when it paid $173 million to take over regional radio group RG Capital and then $196.5 million for most of the British-owned DMG Radio Australia’s regional radio stations. The stations then became the seed asset of the Macquarie Media Group, which listed last year.

Macquarie was estimated to have pocketed between $70 million and $124 million from the sale of the radio businesses into the listed vehicle.

MMG then moved offshore, paying $416 million for 60 per cent of Taiwan Broadband Communications.

But MMG has been one of the worst-performing of Macquarie’s satellite funds, with investors baulking at the complicated structure and management fees.

Potential buyers of the radio assets include John B. Fairfax’s Rural Press, which already owns 10 regional radio stations and has often stated its desire to buy more, and rival regional newspaper group APN News & Media.

APN chief executive Brendan Hopkins recently told The Australian that the local industry could learn from New Zealand, where APN owns radio stations and newspapers in the same markets. “Local radio working closely with local publications will give better local content than if they were working separately,” he said.

Meanwhile, John Hartigan, the chief executive of News Limited, which publishes The Australian, is heading to the US this week to brief parent company News Corporation on the unfolding Australian media landscape. (source The Australian)