Rugby Union Fails To Deliver Numbers For Stan
When Foxtel boss Patrick Delany walked away from Rugby Union “Because the numbers did not stack up” the nine network who were desperate to build out sport streaming on their Stan network, swooped forking out $100 million in cash and contra for the rights.
Appearing at the Macquarie Australia Conference new Nine Entertainment chief executive Mike Sneesby finally admitted that the investment in Rugby Union was not delivering the numbers they expected.
He also admitted that Nine’s streaming service, Stan, was ‘consolidating’ in the post-Covid environment.
One bright point was that the average revenue per user was higher than anticipated.
With the NSW Waratahs failing to win this season the new “home of rugby”, Stan Sport is seen as an expensive investment for the network according to analysts.
Stan currently has 2.3 million active users, with close to 150,000 of those also subscribing to Stan Sport.
Sneesby failed to confirm how many of the 150,000 were actually paying to watch Rugby Union on Stan after the business gave away subscriptions to attract interest in their Rugby offering.
“I think what we’ll end up with versus our business plan is a slightly more revenue per subscriber on a lower number,” he said.
“But overall, we’re tracking pretty much where we expected to be at this point, so we’re very happy with that outcome.”
Mr Sneesby, who stepped into the CEO position at the start of April, said his focus while in the top job would be on cost-outs, growing the business and ensuring its financials remain solid.
“The way that we’re set up in terms of the cost-out for the business, particularly around the more traditional areas that aren’t in growth, and our focus back into growth areas of the business — digital, video on demand and subscription — all of that strategy … (is) very sound.
“As we’ve gone through the merger, we’ve gone through setting up the right cost base for the business, and we’ve gone about focusing in those digital areas, the next natural step for us is to ensure that we don’t become complacent about the strength of our cash flows and the strength of our balance sheet.”
The company was in a strong position financially, he said, as he pointed to long-term growth opportunities within the business.
Mr Sneesby expects Nine’s free-to-air revenue growth to hit 50 per cent in the June quarter. Costs for the year, meanwhile, are expected to be down 3 per cent.
Third quarter metro free-to-air market revenue was up 6 per cent on the prior corresponding period, with Nine’s share more than 41 per cent.