Home > Industry > Free TV Woes: Nine Post $203.4m Loss, Murdoch’s Takeover Bid For Ten Clears

Free TV Woes: Nine Post $203.4m Loss, Murdoch’s Takeover Bid For Ten Clears

Blaming a 3.5% shrink in the total TV ad revenue market, coupled with notable asset write-downs inclusive of its free-to-air TV network, Channel Nine has announced a $203.4 million full year loss.

Total revenue dipped 3% to $1.24 billion with TV-specific revenue falling 4.4% in the year. Group earnings-before-tax (EBITDA) increased by 2% (to $206 million), inclusive of a $33 million benefit from the regulated removal of licence fees.

A group-wide reduction in costs (5%) helped lift Nine’s underlying profit to $123.6 million, which is a 2.7% increase from the previous year.

As at 30th June, net debt was $225 million. The increase of $46.9 million from last year was a result of Nine’s strategy to create local content to replace underperforming US material, in addition to its payment of licence fees and a short term debtors build.

A total of $327.1 million in impairments was recorded – up from $311.9 million in the first half – with the non-cash impairment of its TV network remaining at $260 million.

Nine acknowledged that rival Seven had taken a hit on its revenue, especially through its coverage of the Rio Olympics.

Other notable expenses included an $86 million provision to leave the ‘Life of Series’ obligation with Warner Brothers comprised of a suite of US comedies and dramas.

Interestingly, Nine boasted a 37.1% commercial network share [of the 25-54 demographic] and a number one share in all key buying demographics.

Nine remains positive on its future outlook, expecting TV revenue to rise 15% in the September quarter and digital revenue to lift 8%.

Chief Executive Hugh Marks affirms, “With a strengthening balance sheet, and significant operational momentum and leverage, Nine enters the new financial year in a much stronger position”.

Across the road, today the ACCC has given their clearance for Lachlan Murdoch and Bruce Gordon’s takeover bid for Channel 10.

Gordon [owner of Birketu] and Murdoch [owner of Illyria] each propose to acquire a 50% interest in Ten and operate as a joint entity.

The ACCC has now green-lit the proposed joint bid, stating it is unlikely to cause “substantial lessening” of competition in any related market.

ACCC Chairman Robert Sims stated:

“Even though incentives to compete may be weakened if the proposed acquisition proceeds, Ten and Foxtel/News Corporation will remain competitors in a number of markets and will be subject to our competition laws which prevent them from making anti-competitive agreements”.

Channel Ten is currently in voluntary administration with KordaMentha. PPB Advisory has been appointed as receivers by the Commonwealth Bank in June after a $200 million debt fell due in December.

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