Nine Entertainment and Southern Cross Austereo sign ‘landmark’ affiliate agreement
Nine Entertainment Co., is set to switch its affiliate TV broadcast rights to Southern Cross Austereo from WIN Corporation as of July 1.
Under the terms of the new agreement, hailed in a press release as a “landmark”, SCA will pay Nine 50% of its ad revenues to rebroadcast its content in regional areas in Queensland, Southern NSW and Victoria.
According to the release the companies will also “work together on a number of opportunities to mutually grow their businesses” with the deal set to run for five years.
The deal signals the end of Nine’s long-standing relationship with Bruce Gordon’s WIN Corp.
Tensions between the pair have been high with a six-month affiliate deal extension secured just hours before it was due to expire on December 31, with WIN then launching legal action against Nine over its streaming service 9Now.
Yesterday a court ruled Nine could continue to stream its 9Now service into regional areas after WIN claimed it was undermining its business model.
Gordon is also the largest shareholder in Nine, owning just under 15% of the shares in the listed company. The Bermuda-based businessman also owns 14.99% of the shares in Network Ten.
It now looks likely WIN and Ten will be forced into an affiliate agreement as of July 1.
Earlier today Nine CEO Hugh Marks had poured cold water on the idea of the network acquiring a regional broadcaster even if reforms to media laws allowing it were passed telling a Senate inquiry: “What does adding an acquisition of regional Australia add to us as a content business? Perhaps very little.
“We run this company as a content business which is focused on expanding the number of platforms on which we provide content; the business models around that.
“I don’t see acquiring a regional broadcaster as high on our priority list.”
A merger between Nine and SCA had been speculated, with Nine taking a 9.9% stake in SCA in March.
Marks said in the statement: “This is a great outcome for Nine and SCA. We are confident that, together, we will offer a premium viewing experience for audiences and a best-in-class platform for advertisers.”
Grant Blackley, CEO of SCA said: “I’m excited SCA is entering into this landmark long-term agreement with Nine, a media company which has so successfully informed and entertained Australian audiences for many decades.”
The deal will give SCA, which has struggled in recent years in its TV business on the back of poor ratings for its current affiliate Network Ten, access to Nine’s content proving significantly more popular with audiences and advertisers. Nine has also achieved the 50% ad revenue target it was aiming for from WIN in its last affiliate agreement.
It may also see Nine given more ready access to promote its content on SCA’s national radio networks TripleM and the Hit Network.
Related:
Are Nine and WIN headed for divorce?
Acquiring a regional broadcaster ‘not high on priority list’ claims Nine CEO Hugh Marks
WIN loses bid to get 9Now live streaming service banned from its broadcast area
The tie-up also has interesting connotations for theories around which media companies will merge if and when the government scraps controversial media laws prohibiting ownership of more than two of three traditional media or reaching more than 75% of the population, the one which prevents Nine and SCA merging officially.
Those laws were due to come before parliament this year, but have now been shelved with Prime Minister Malcolm Turnbull expected to call an election for July.
Alex Hayes
The release:
Nine Entertainment Co. (Nine) (ASX:NEC) and Southern Cross Austereo (SCA) (ASX: SXL) have today announced the signing of a new regional television affiliation agreement. The five year agreement will see SCA broadcast Nine’s metropolitan free-to-air television content into regional Queensland, Southern NSW and regional Victoria from 1 July 2016.
Under this landmark agreement, the SCA channels will carry Nine’s branding and broadcast its premium Australian and international content including The Voice and The Block, as well as all NRL and Cricket broadcasts, providing a seamless Nine brand across metropolitan and major regional markets.
SCA will pay Nine an affiliation fee of 50 per cent of its television revenue.
As part of the new affiliation deal, Nine and SCA have agreed to work together on a number of opportunities to mutually grow their businesses.
The agreement provides for a substantial expansion of news services broadcast by SCA. Nine’s market leading News bulletins featuring international, national and locally produced news will be broadcast to regional markets across Queensland, Southern NSW and Victoria.
As part of the arrangements, SCA will provide national sales services for Nine’s NBN channel in Northern NSW and NTD9 in Darwin. This will provide advertisers with a centralised port of call for their regional advertising on Nine’s content across the entire Eastern seaboard.
Hugh Marks, CEO of NEC said “This is a great outcome for Nine and SCA. We are confident that, together, we will offer a premium viewing experience for audiences and a best in class platform for advertisers.”
Welcoming the agreement, Grant Blackley CEO of SCA said “I’m excited SCA is entering into this landmark long term agreement with Nine, a media company which has so successfully informed and entertained Australian audiences for many decades.”
WOW!!
User ID not verified.
What happens to Tas? In particular WIN Tas.
Maybe I’ve missed it but it doesn’t seem to get a mention.
Southern Cross there is a 7 affiliate. TDT is their 10, So does the state not get 9 programs down in the new agreement?
User ID not verified.
Can you imagine the pandemonium on Bruce Gordon’s yacht when he was told the news? ….Assuming the carrier pidgeon survived the journey to Bermuda…
User ID not verified.
Poor old CTC7 Canberra. CTC7 started off as regional operator until agregation in 1989. It switched from its somewhat 7 logo based focus over the years (under the pathetic guise of Capital TV) to the TEN network which was a welcomed by Canberrans. Now CTC7 (Canberra’s Licensee) will move a third time to NINE. Lets not muck around. All three commercial TV networks are a disgrace and an embarrassment. The voice over promos show the Sydney based networks full of them self. First the ACT & Canberra had to travel the entire 1980’s on VHS just to get proper TV like Sydney. Since the siphoning off of traditional favorites prior to digital tv, Australias commercial tv has been an almost a bigger embarrassment as Sanator Hanson Young, to ordinary Australians. Who cares about drunken footballers and cooking shows. Time for Australian commercial TV to refocus, grow up or die in the face of Internet TV broadcasting.
User ID not verified.
This is precisely what Bruce Gordon deserves.
The bully in the schoolyard has his just deserts. He can run ‘Matlock’ for 24 hours on WIN with no one watching!
Well done Grant & Nine.
User ID not verified.
I am so confused!! Where I live we have Win & Southern Cross 10. Does this mean Southern cross 10 will broadcast channel 9 content and Win broadcast Channel 10 content ???
User ID not verified.
It’s Saturday and there are still people in boardrooms across Australia who are ROFLMAO at this deal. In one particular Sydney based investment group most certainly.
Gordon has been the spoiler in so many deals that would have delivered massive change in Australian media and now is getting his just deserts. The idea that he has been a great media baron is a fiction, he’s just the oldest guy still standing who happened to luck out a couple of times along the way.
If Nine and SCA capitalise on the great portfolio of outlets they have (which Ten and it’s farcical board never saw or understood), they could be the dominant player in the sector, a giant once again.
WIN has no choice unless ‘every night is western night’ again, except to take Ten programming and Ten should be able to extract a premium for that.
As for Tasmania PW, the deal with WIN & SCA down there is basically a joint venture to deliver ‘the extra’ network – which will continue even though direct ownership affiliation might change – Tassie will continue to get all stations.
Congratulations to Hugh Marks at Nine for pulling it off, a master stroke ridding himself of an annoying little burr.
Now back to rolling on the floor and laughing out loud – anyone else’s ribs hurting.
User ID not verified.
PW – If the experience of Canberra in 1988/89 is any guide, you won’t be getting Nine programs at all. In 1988 the one commercial TV station was taken over by TEN which removed Nine programs from the schedule. It wasn’t until aggregation started in April 1989 and WIN began broadcasting in the region that Nine programs returned to Canberra.
User ID not verified.
Television in Tasmania, SA and WA will remain the same for the time being
User ID not verified.
Ha! I’ll just be over here in 2016 watching Netflix guys.
User ID not verified.
Whats happens to Southern cross TEN viewers in Nothern NSW that are in the same market as NBN Newcastle which Nine owns..?
User ID not verified.
Oh 2016, you’re so wise!
User ID not verified.
Makes you wonder about what the ACCC might have to say about NNSW. Two competitors (SCA10 and NBN9) acting in collusion against a third competitor (Prime7). At least the lawyers will have fun with that one!
User ID not verified.
The northern NSW and Newcastle market won’t see any change. NBN will remain the main 9 network channel, SC Ten will remain as the ten network station and prime television will keep showing the 7 network channels
User ID not verified.
On Point, you hit the nail on the head, so true. The luck has run out.
John, SCA still own the licence in NNSW, they will continue their affiliation with 10.
SCA have affiliation agreements with all three metros to cover their various markets, so there’s no reason why this won’t continue.
User ID not verified.
You’re so cool 2016. Can we hang out and eat pulled pork sliders together?
User ID not verified.
So… how do they move their local branded news services over?
All that money and time spent on positioning brands with personalities. It would be like 10 and 9 news putting their personalities on their competitors news desks…..
Can you imagine the discussions in the news rooms…
User ID not verified.
Haha Nine have signed with the wireless cowboys !!!! Kerry Packer would be turning over in his grave. Wonder if a 50% deal will be sustainable for SCA, they are walking around like roosters now, wonder where they will be in a couple of years…….
User ID not verified.
Steve – the SC10 news updates are quite simple, not difficult to change background. Who knows, Deb Wright, looking after regional strategy and the news execs may already be in discussions with SCA. Their newsroom keeps doing the updates they’re required to by law.
WIN news rooms is where there’ll be huge discussions, all on the mainland will be very concerned because the lack of revenue from a 10 affiliation will not sustain local news, no regional affiliate of 10 has sustained this since the 90’s. Bruce doesn’t operate a charity.
Dooni – what do you mean of wireless cowboys? Rhys Holleran and the many of the other ‘regional’ ‘thinkers’ have left SCA, have to be optimistic that leadership is improving for the better now.
User ID not verified.
What happens to the sales teams?
User ID not verified.
Hi what will happen to win-gem and win-go and life from july 1? And with one and eleven??
User ID not verified.