Something felt off about this merger from the very beginning. Seven West Media Australia and Southern Cross Media joined forces in early January 2026, creating a combined media entity valued at approximately $420 million. But even before the ink dried, some of the loudest voices in the room were saying it was a mistake.
 
Figure 1: Seven West Media Australia logo, one of the two companies involved in the merger with Southern Cross Media. [Business News Australia]
Shareholders, analysts and market observers had raised concerns well before the deal closed. The warnings were clear. The deal went ahead anyway. And within seven weeks, the cracks were already showing.
Why This Seven West Media Australia Merger Raised Red Flags From the Start?
Southern Cross Media argued the merger would strengthen its radio business by allowing cross-selling of advertising across Seven West Media Australia’s print and television arms. The pitch was scale. The promise was growth.
Figure 2: Southern Cross Media logo, representing the radio broadcaster that merged with Seven West Media in early 2026. [Southern Cross Media]
But investors were not convinced. Sandon Capital, one of Southern Cross’ biggest shareholders, openly challenged the wisdom of the deal. The core concern was straightforward: Southern Cross was merging its well-performing radio business with a free-to-air television Company facing serious structural headwinds. Across the free-to-air television industry, revenues were expected to decline by 10% on average in the current financial year, with further pressure from rising interest rates hitting both business and consumer spending.
Seven West Media Australia: Why the Revenue Strategy Faces Doubt
The cross-selling advertising model at the heart of this Seven West Media acquisition news story is not a new idea. It has been tried before, and it has struggled before. Nine Entertainment, which owns television, radio and publishing assets, attempted a similar approach. There is little evidence it meaningfully boosted the performance of its free-to-air broadcasting business.
A similar pattern played out in financial services. Two decades ago, major Australian banks acquired wealth management and insurance businesses, promising to cross-sell products to existing customers. It never worked. Those businesses were eventually sold off. Critics of the worst media deals Australia has seen argue this merger risks repeating history.
Kerry Stokes’ Advantage in the Seven West Media Acquisition Deal
No analysis of Seven West Media Australia is complete without understanding Kerry Stokes. The billionaire’s SGH Limited was the largest shareholder at Seven West. He wanted the deal done. And crucially, a loophole in ASX listing rules meant the merger only required approval from Seven West shareholders, not Southern Cross shareholders, to proceed.
Figure 3: Kerry Stokes, chairman and largest shareholder of Seven West Media Australia, who supported the merger. [Australian Financial Review]
For the Stokes family, the merger offered something valuable. The deal was structured in a way that netted SGH Group hundreds of millions of dollars in losses that could be used as tax credits, worth far more than their actual stake in Seven West. Some Southern Cross shareholders, who declined to speak publicly, citing fear of reprisals, argued the Southern Cross board was naive in its negotiations. In any deal involving the Stokes family, they noted, there is typically only one winner.
Early Post-Merger Results Put the Deal Among Australia’s Worst Media Mergers
The merged Southern Cross Media released its first-half result for this financial year, reporting a net loss of $7.4 million, a figure that included substantial merger-related costs. Executive Chairman Heith Mackay-Cruise is committed to at least $30 million in cost savings by the next financial year.
The sharemarket responded swiftly. Southern Cross stock fell almost 10% following the result. More than $100 million in market value has been wiped from the combined Company since the merger was announced late last year. Shareholders described the earnings as “awful.” Even measured observers acknowledged the Company was operating in a deeply challenging environment.
A Leadership Change That Shocked Staff and Investors
At 5.32pm on a Monday, an ASX notice went out. Jeff Howard, who had served as CEO of the merged Southern Cross Media for just seven weeks, had been dismissed. The announcement shocked both staff and investors.
Figure 4: Jeff Howard, former CEO of the merged Southern Cross Media, dismissed seven weeks after the merger. [Australian Financial Review]
Howard had previously led Seven West Media Australia as CEO, executing a cost-cutting campaign that wiped $100 million in costs and cut 150 news staff from the business. He had been a close ally of Kerry Stokes. But when Stokes resigned as interim chairman of the merged entity, the Friday before the results update, Howard lost his most powerful protector. The new board, no longer aligned to Stokes’ direction, moved quickly.
Mackay-Cruise, stepping into the executive chairman role, said Howard was not moving fast enough to realise the benefits of the merger.
Final Thoughts
What was billed as a transformative move for Seven West Media Australia now looks like a warning sign. Early losses, shareholder unease and a sudden leadership exit have reinforced doubts that were present from the start. As with other worst media deals Australia has seen, scale alone has not solved structural challenges. Unless the merged group delivers clear earnings improvement soon, this deal risks being remembered as a costly misstep rather than a strategic win.
FAQ
Q1. What is the Seven West Media and Southern Cross merger?
Ans. The two Companies merged in early January 2026, creating a combined media entity valued at approximately $420 million, bringing together Seven West Media Australia’s television and print assets with Southern Cross’ radio business.
Q2. Why did shareholders oppose the deal?
Ans. Key shareholders raised concerns about merging a strong radio business with a struggling free-to-air television Company facing revenue declines of approximately 10% in the current financial year.
Q3. What were the first-half results of the merged Company?
Ans. The merged Southern Cross Media reported a net loss of $7.4 million for the first half of the current financial year, with more than $100 million in combined market value lost since the merger was announced.
Q4. Why was Jeff Howard fired?
Ans. Howard was dismissed seven weeks into his role as CEO of the merged entity, with executive chairman Heith Mackay-Cruise citing insufficient speed in realising merger benefits.
