Nine Entertainment shares have surged over 10% with investors punting that the advertising market is on the way up.
The network, who’s media division was this morning spruiking a Disney + move to include sport on their platform which some claim could be a threat threat to Nine Networks ambition’s for streaming platform Stan, who are trying to build out a sport streaming platform, ahead of the takeover of the Foxtel Group by UK sport streaming Company DAZN.
The surge in Nine shares came after arch rival, Seven West Media, suggested in an earnings update that a weak advertising market was finally turning with bookings likely to grow.
In a note to clients, Barrenjoey analyst Eric Choi said there were “reasons to become cautiously optimistic” after Seven West indicated that bookings in the three months to March 31 could be higher than the same period last year.
Choi said there were “positive implications” for Nine, adding that earnings could be $25 million higher than the firm’s current $441 million forecast for the 12 months to June 30.
Nine Media claims that Disney is entering the sports streaming market in Australia, moving its existing coverage of the top American sports leagues, including the NBA and NFL, to its streaming service Disney+ at no extra cost to subscribers.
ESPN is one of the biggest sports broadcasters globally, and the move to take the platform in-house signals an intent to expand its live sports offering in Australia.
The only problem is that US sport attracts poor ratings in Australia outside of the Superbowl and the addition of ESPN sport is more about value adding in an effort to hold onto clients who have been deserting the platform because of a lack of new content.
Observers claim that Stan and Kayo face little threat from the move as US streaming networks, who have all met with both the NRL and AFL during the last rights negotiations.
All of these networks rejected offers to bid for local Australian sports, because of the lack of appeal in the US market.
While there is no set date for the introduction of ESPN to Disney+, a spokesperson said it will be in the “coming months”.
Taking a pot shot at arch rival Foxtel and their Kayo network Nine Media did admit that Disney has not cancelled their ESPN licence with Foxtel, with the door left open for Foxtel to decide as to whether they want to continue licencing ESPN in the future.
Disney+ has an estimated 3.1 million paying subscribers in Australia according to Telsyte.
News Corp agreed to a sale of Foxtel to sports streamer DAZN in December for $3.4 billion with the real possibility that Foxtel could end up with more European sport including European and UK soccer.
