Nine ditches SCA for WIN, striking new affiliate deal
Nine Entertainment Co has ended its five year affiliation agreement with Southern Cross Austereo, instead returning to WIN for at least seven years in a deal which will see the regional media company pay Nine about half of its regional advertising revenue.
Nine defected from WIN in favour of SCA in 2016, with that five year deal reportedly worth almost $500 million and ending SCA’s TV brand.
WIN’s affiliation fee will be the same as that paid by SCA: approximately 50% of its regional advertising revenue. From 1 July, the contract will involve the promotion of Nine across WIN’s TV and radio assets, and WIN’s provision of a sales services for Nine in northern New South Wales and Darwin.
As part of the affiliation, WIN will also broadcast Nine’s metropolitan free to air content, including multi-channel content from 9Go, 9Gen, and 9Life, across Tasmania, regional Western Australia, Victoria, Queensland, and southern New South Wales.
In a note to staff, Nine’s outgoing CEO Hugh Marks, who will be replaced by Mike Sneesby at the end of the month, acknowledged that: “One of the impacts of the change in affiliate partner will be an impact to our regional news services which we currently provide on behalf of SCA.
“We are aware that there will be some roles impacted as a result of this change but those impacted can be assured that Director of News and Current Affairs Darren Wick and his team are actively looking at options for redeployment for as many employees as possible.
“Under the changes WIN will do its local news bulletin in regional areas at 5.30pm before taking the 6pm state bulletin in each state. WIN will also take over sales representation for NBN from SCA.”
In the $5 billion company’s announcement to the market, lodged with the ASX this morning, Marks added that WIN offers more reach for Nine.
“While our relationship with Southern Cross has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine’s premium content into more regional markets under one agreements, and to work co-operatively with them on a national and local news operation, mean this is the right time for us to return to WIN,” he said.
“The terms of this new affiliation agreement should be positive to Nine’s EBITDA from FY22 through the broader reach of Nine’s channels and by enabling incremental efficiencies across both sales and news.”
Marks
SCA confirmed to the ASX it will continue negotiating with Ten, with whom an affiliation deal is likely to be struck. Before the Nine agreement came about in 2016, SCA’s affiliation sat with Ten for more than two decades.
The radio company said it had delivered strong commercial results for Nine. It has an agreement with Seven until June 2022, accounting for 20% of SCA’s total TV advertising revenue.
Late last month, Marks delivered Nine’s half year results, in which the largest locally owned media company recorded a 79% net profit surge to $182 million, revenue of $1.2 billion, down 2%, and earnings before interest, tax, depreciation and amortisation (EBITDA) of $355 million.
Bruce Gordon, WIN’s owner, is also Nine’s biggest shareholder, with a 14.94% stake through his investment company. This week, multiple reports emerged that Gordon is pushing for a spot on the Nine board, which is in a period of tumult due to the Nick Falloon investigation, Patrick Allaway’s resignation, and Mickie Rosen’s reported consideration of her resignation.
Despite the apparent unrest, chair Peter Costello assured journalists at an event announcing Sneesby as Marks’ successor that the “board is not fractured”.
“I want to make this clear. There’s only one corporation here. It’s the Nine Entertainment Corporation. Every person is a director of that corporation. There aren’t two corporations,” he said, referring to the alleged board split: Fairfax imports Falloon, Allaway and Rosen on one side, and Costello, Samantha Lewis, and Catherine West on the other.
“Far be it from me to criticise reports in the media, because we’re a media company, but that is where things are.”
Gordon
Earlier this week, Antony Catalano, real estate entrepreneur and owner of regional newspaper company Australian Community Media, upped his stake in Prime Media Group, WIN’s competitor regional TV company, purchasing the shares from Gordon. The transaction will not be official until it receives approval from the Australian Communications and Media Authority (ACMA) due to media diversity laws. Catalano and Gordon teamed up in late 2019 to block a proposed merger between Prime and Seven West Media.
Gordon’s WIN said the new Nine deal will further the business’ “already strong relationship with Nine”.
“Nine has clearly established itself as Australia’s leading media business and we are excited to be returning to carriage of the Nine broadcast content to our regional viewers,” said CEO Andrew Lancaster.
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Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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