Seven West posts $1.8bn loss after major writedowns in TV licences and goodwill

Seven West MedisSeven West Media has posted a $1.8bn loss on the back of a $2.1bn writedown in the value of its TV licences and goodwill.



The media company told the ASX that its revenue was down 4 per cent to $1.7bn while earnings before interest and tax was $356.3m, down 12.7 per cent.

Commenting on the poor financial result Tim Worner CEO of Seven West Media said in a statement: “This has been a year of transformation for our business as we put in place the structures and architecture that will define the future development of Seven West Media.

“Our focus is the delivery of our content to our audiences anywhere, any screen, anytime.”

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The results come less than 24 hours after the network announced its part in a record breaking $2.5bn deal for the next round of AFL rights, which is expected to see it pay more than $800m to the code over six years.

This morning Seven also announced it would start streaming all of its channels 24/7 on mobile devices.

The writedown came amid a soft advertising market, with the media company posting declines in advertising across the board with television revenue down 3.1 per cent, Pacific Magazines falling 4.9 per cent and the West Australian Newspaper revenue falling 13.3 per cent.

Network Seven’s television revenues fell to $1.279bn (down 2 per cent), newspapers to $260.9m  (down 10.4 per cent), and magazines to $220.1m (down 7.3 per cent).

Worner this morning emphasised that television represents more than 70 per cent of its revenue with a breakdown of its many smaller subsidiaries posting double digit percentage declines in audience.

The TV division had earnings before interest and tax of $296m, down 5.1 per cent.

Yahoo7’s earnings before interest and tax was $25.5m down 22.4 per cent on last year, Seven West’s newspapers saw earnings fall 27.7 per cent down to $51.7m while magazines fell 0.5 per cent  to $20.5m.

A breakdown of the writedowns shows there was a $960.9m writedown in goodwill, while the value of Seven’s TV licences also had a $929.3m writedown as TV networks continue to press the government to drop the cost of the licences.

Worner also touted the importance of its video streaming investments in Presto and the roll out of Plus7 to all devices. “Presto user growth has been strong and is in line our expectations,” he said.

“You will see a big step up in the marketing of Presto in the coming weeks and building on this strategy we are proud to announce 24/7 live streaming for all of our Seven broadcast channels.”

“These will extend our reach – live, free and out of home and in your hands.”

The move Plus7 move sees Seven build on its previous live streaming efforts with breakfast program sunrise.

Among the Seven executive team Worner’s salary this year was $3.1m down from $3.5 last year while Kurt Burnette was $1.6m down from $1.8m last year.

Seven’s share price was up 0.61 per cent as of 12pm today to $0.82.

Nic Christensen


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