AGM season: Sport is key for future at Seven and Nine

Both Seven West Media and Nine held their annual general meetings yesterday, with a focus on sporting rights and fiscal responsibility.

Given the current cost-of-living crisis, and the cascading impacts of spending patterns, Nine chairman Peter Costello noted “cyclical softness in advertising markets” and that Domain, which Nine owns 60% of, has been “affected by interest rate impacts on the property market”. Likewise, CEO Mike Sneesby acknowledged the “tougher economic conditions which have impacted the broader industry.”

Despite this, Nine delivered its second-highest EBITDA ($591m) and net profit ($262m) in history for FY23 – second only to the previous year. “Our cash flows and balance sheet are strong,” Sneesby said.

Seven chairman Kerry Stokes likewise noted a “softening of the overall TV and wider advertising market”, while CEO James Warburton referred to their FY23 results as “a solid performance in a challenging environment.”

“While we are unrelenting in our ambition to grow our audiences and revenues, we are absolutely disciplined in our approach to our operating costs and our investment for the future,” Warburton said. Seven’s EBITDA for FY23 was $280 million, with a net profit of $146m.

Seven is, however, still carrying a lot of debt – namely, $249 million, “down slightly” from $256 million in FY22. “While we accelerate our digital future in FY24 and run off the last of our onerous contracts, we have been very deliberate in maintaining a conservative balance sheet, given the uncertain economic outlook,” Warburton said.

“We have a proven track record of managing costs and this continues through a more difficult economic environment,” he continued. “Our balance sheet is strong and conservative, and we are driven by economics not ego when acquiring content.”

Seven has also refinanced its debt facilities for four more years, and earmarked $60 million in costs that can be cut over the rest of FY24 and FY25 – part of what Warburton calls a “commitment to operate our business prudently.”

Sports is key to the ongoing health of both networks.

Much like at their upfront this year, Nine’s focus is the Olympics, for which it holds the rights until Brisbane 2032.

For Paris 2024, Nine is boasting “almost 10,000 hours of content available over 32 different sports” across its various broadcast and streaming platform, with more content across print and audio.

Sneesby also announced it had gone to market with “the first wave of commercial opportunities for advertisers” across the Paris Olympics and Paralympics.

“Our proposition includes an almost ten-month marketing platform for advertisers – the Road to Paris – starting with the Gangwon Winter Youth Olympic Games in January and running all the way through the Paris Olympic Games and culminating with the Paris Paralympic Games in September,” Sneesby said.

“We have a number of partnerships confirmed and we are on track to sell all major partnership and sponsorship packages. We are also confident that progress in our commercial partnerships around tentpole assets like the Olympic and Paralympic Games will contribute further to underlying revenue share performance across all of our platforms.”

Costello said that Nine believes sport “will remain a key driver of television into the future,” noting Nine’s renewed agreement with Tennis Australia through to 2029.

Kerry Stokes noted Seven’s signing of new media rights agreements with the AFL and Cricket Australia, “ensuring the most popular winter and summer sports will remain on Seven – live and free – for many years to come.

“Importantly, the new agreements give us digital rights to both sports for the first time.”

Stokes said that 7plus will broadcast “four billion minutes” of new AFL and cricket content, claiming this will “change the way sport is watched online.”

In what seems a lot like a shot at Nine’s big spending on the Olympics, which Seven previously held the rights to, Warburton added: “We are extremely pleased with our landmark sports and content deals that will drive our digital future, but we have also demonstrated real discipline in our decision making when the economics on certain major events have not stacked up. “


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