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Seven flags deeper ties with News Corp

Seven West Media has forecast a deeper commercial relationship with News Corp, but stopped short of predicting a merger between the two companies.

Speaking to investors following the company’s financial results, CEO Tim Worner wished Nine and Fairfax well in their proposed merger, but said Seven’s audiences and objectives were much more closely aligned with that of News Corp.

Seven and News Corp will “deepen commercial ties”

 

Indeed, the proposed merger between Fairfax and Nine, he said, gives Seven the opportunity to pounce.

“For us, we’re looking at what sort of opportunities will arise because of the enormous amount of work that’s going to have to be done to put those two organisations [Nine and Fairfax] together. That is almost inevitably going to lead to opportunity, and we need to focus on that. We wish them well. Nine is a partner. Fairfax is a customer. We wish them well in their pursuits,” he said.

When pushed by investors on what a tie up with News Corp would look like – particularly in Perth where Seven West Media has published The West Australian newspaper since 2011 in addition to running a television network – Worner said there was a “range” of ways the companies could work together.

“I think there’s a range of things we can do,” he said. “In fact we’re already in partnership with News in a number of areas. We’re printing for them in Western Australia. They’re providing us with content in Western Australia. And I just think there are a range of activities that we can undertake – not just with News Corp, but with other partners – in the absence of a corporate transaction. I guess my point was, you don’t need a corporate transaction to actually be able to more effectively compete.”

Worner also used the opportunity to praise News Corp’s transformation and highlight the synergies between the organisations.

Tim Worner (L) on the Mumbrellacast last week

“I think that there’s going to be an opportunity for us to deepen commercial ties with a number of organisations, and one of those has to be News Corp. They’ve done a great job with those mastheads [The Daily Telegraph, The Australian etc.], keeping them fresh and vibrant. And in fact, the News Corp audience is far more compatible with Seven’s audience, and so you may well see these developments in that regard.”

Seven executives were then asked if they had an interest in radio assets considering the change in media ownership laws and Nine’s purchase of Macquarie Media (which would accompany its purchase of Fairfax Media).

Worner didn’t rule out the possibility, but shut down the idea a purchase was in Seven’s imminent future.

“I guess that would be possible. It’s not something that we’ve spent a whole lot of time thinking about. It’s possible. I would say that Macquarie Radio is a very effective partner. We’re a customer of theirs, and we’d like to be a customer of theirs in the future.”

Worner’s comments echo those he made on the most recent episode of the Mumbrellacast, which you can listen to here.

This morning, Seven posted its financial results to the ASX, which saw cost-cutting exercises and previous write-downs pay off, with a $134.89m profit – up from a $745m loss last year.

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