Broadcaster Shares Surge As Gov Cuts TV Licensing Fees
The Federal Government today announced it will be cutting back on TV broadcast fees in order to relieve pressure on the sector amid concerns about viability.
As reported by News.com.au, the government plans to use its regulatory powers to abolish $127 million in broadcast licence fees for 2016/17 as an interim measure ahead of the media reform package passing through parliament.
If this happens, the government plans to replace licence fees with cheaper spectrum usage charges.
Following the news, the ASX has been abuzz with Seven West Media, Southern Cross Austereo and Nine Entertainment all revising prior fiscal expectations.
Nine Entertainment Co claims the fee-cut will save it approximately $33 million, raising its bottom-line for full-year earnings to between $200 million to $210 million.
Southern Cross Austereo says it will be pocketing an additional $11.8 million, courtesy of the change.
Seven West Media has yet to comment on the move but saw its share price rise 3.9% to 73.3 cents following the news.
Free TV Australia’s chairman Harold Mitchell has praised the decisicion, saying “in the internet age, it makes no sense to continue to impose the world’s highest licence fees when these foreign media tech companies pay nothing.”
“Licence fee relief is critical for broadcasters to invest and transform their businesses,” he said.
The move comes as the third-biggest commercial TV network, Channel Ten, enters voluntary administration following their failure to secure a key credit loan.
Ten’s fiscal trouble has put pressure on parliament to pass the reforms, with Communications Minister Mitch Fifield calling the crisis at Ten a “wake-up call” for those who oppose the package.