Affable and easy-going, you’d be forgiven for mistaking ex-Yahoo executive Grant McCarthy for a typical Aussie ad-sales guy blagging his way around Asia. That is until you realise that his media-savvy exterior coexists with a dedication to media investment you’d be hard-pressed to find in a less outgoing banker.
McCarthy’s blend of characteristics mirrors that of his company. Lincoln Crowne is a boutique investment bank focused on the media and telecoms space in South Asia and Australia. Significantly, for the man who previously headed business development for Yahoo Mobile in Southeast Asia, it is a role that places him at the centre of the rapid changes that are assailing today’s media industries.
“About half of our business is in corporate finance - putting together mergers and acquisitions, capital raising and financing,” McCarthy explains.
“The other part of the business is more of a strategic advisory practice. We have a look at media companies and telcos to see whether they can best achieve their goals by growing organically - through re-investing capital - or inorganically, through M&A.”
Despite the obvious differences between Yahoo and Lincoln Crowne, McCarthy insists his current role as managing director is in essence quite similar to the position he previously held as director of business development. “Business development is business development,” he points out, not unjustifiably.
“Grant’s pretty unusual for an investment banker in that he’s really down to earth - and more driven by intellectual curiosity than anything else,” adds a source. “The rest of us stay in safe corporate jobs, but Grant saw an opportunity to branch out on his own and took it.”
The opportunity that McCarthy saw reflects the need for a specialist bank to service the Asian media industry. Most of Asia’s media companies are in the mid-cap range, evaluated between US$20 million and $120 million - large businesses in the real world, but not big enough for the major investment banks to spend time on. “In the US, in Europe or in Australia, most companies this size would only work with an investment bank on a project basis - bringing in an M&A shop when they need that help,” explains McCarthy.
“That model simply doesn’t work in Asia; clients here want to have longer term relationships with their bank, to feel that their business is well-understood.”
Given his unique vantage point, McCarthy’s views on the future of media in Asia are rarely dull.
“Advertising dollars are driving a lot of changes in emerging market media, as media buyers are becoming more attuned to the importance of effectiveness of their spend,” he points out. “They want to reach populations outside the cities as well as in traditional hotspots like urban centres - but they don’t want to have to deal with too many media owners. While regulation means that cross-border consolidation is often tricky, it makes a lot of sense for media owners to consolidate within a country - as we’re seeing in Malaysia at the moment.”
India, meanwhile, can expect to see consolidation in its TV market, which McCarthy labels “over-saturated”. It is, of course, a heady time for media sectors in several emerging Asian economies, and McCarthy is aware of the changes that are being wrought on the agency model - not least because of the advice Lincoln Crowne doles out to agencies that are considering selling out.
“It’s no secret that the big holding companies are looking to buy in to the Asian advertising infrastructure to expand their foothold here,” says McCarthy. “Independent agencies are faced with the question, ‘Do I sell? Or do I try to expand organically?’ and our job is to work with them to figure out the best answer for that company.”
“Selling to a holding company isn’t always a massive jackpot - but sure, it helps give companies some liquidity to work with, and they can maintain some control over future strategy if they hold on to some equity.” McCarthy points to Photon in Australia as an example of how independence can be maintained and made into a functioning business model. “In such cases, having a network is really important,” he says.
While digital agencies remain the flavour of the month, McCarthy says that activation and event marketing players can expect significant attention given their “potential of further earnings”.
Despite the frequent lapses into analyst-speak, the importance of advertising dollars in McCarthy’s world remains indisputably clear.
“With media, advertising is driving a lot of the change, but even if you look at South Asian telcos, they’re focusing on how they can get more revenue from mobile advertising - you simply can’t separate either sector from the influence of the advertising industry.”
Grant McCarthy’s CV
2007 Managing director (Asia), Lincoln Crowne
2006 Director, Yahoo Mobile /FIFA Asia Pacific
2005 Director, strategic planning and development, Yahoo SEA
2004 General manager, search, Yahoo SEA
2003 Business development manager, Yahoo Australia-New Zealand
