Nine expecting TV growth as Olympics save drab H1 results
TV revenue has hit bottom and will bounce back this year, according to a Nine first-half results call that showed lacklustre performance across the media company’s portfolio.
The Paris Olympics coverage saved Nine from going deep into the red, with 9Now revenue up 28% in the second half of 2024. Broadcast revenue was down 3% for the half, despite the availability of the Olympics for linear audiences.
Domain appeared to be the most solid performer in the Nine family, with revenue growth and EBIDTA up 15% to $78 million. That makes Domain the second-biggest contributor to Nine’s profits after TV, pointing to the challenges ahead if it is snapped up by US listings giant Costar.
Costar last week launched a takeover bid which valued Domain at $2.7b, causing a spike in both Domain and Nine’s share price.
Acting Nine CEO Matt Stanton refused to be drawn on the potential acquisition, the single most important issue facing Nine at the moment.
“For Nine, Domain is of strategic importance for our business,” he said. “We are taking the bid seriously.”
Stanton said Domain was becoming more important as Nine became more digital. He would not comment on the tax implications of the Costar bid, saying “it is too early to talk about and comment on this, including the tax base.”
Nine essentially agreed with Seven’s call earlier in the month that the TV advertising market had hit bottom for now, with total TV revenues “expected to grow in the high-single digits” in this quarter, pushed by both digital and linear.
Expectations for the Nine publishing business — that includes the old Fairfax papers and nine.com.au — were flat, and radio was expected to go backwards by “low-mid single digits” in Q3.
Stanton would not be drawn on projecting growth in Q4, saying it was “too short for us to look at. Q3 is good.”
“The sentiment is better in the market, there is no doubt … (also) the audiences have been strong for some time. We have had the tennis and MAFS in this quarter, which have been driving growth.”
Overall, Nine group revenue was flat at $1.4 billion, with EBITDA down by 15% to $286.4 million, and net profit after tax falling by 29%, down some $38.6 million to just $95.1 million.
$35 million in costs were removed during the half, with the original $50 million in savings for the full financial year now projected to be around $60-$70 million.
Stanton briefly covered Nine’s cultural review, which handed down 22 recommendations in late October. Stanton said that Nine will implement all 22 of these, and that two-thirds of them were either complete or underway.
Stanton also pointed towards the company’s rebuilding project Nine 2028, promising more restructuring in the coming months, a further $100 million in removed costs over FY26 and FY27, and a “sharper focus on commercialisation” across the entire business.
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The future looks dim with shareholders surely grabbing those $US.
Has TV really bottomed out? Ask anyone under the age of 35 what they watch on TV, now try the same thing with under 25s and under 18s. The idea of broadcast TV is completely alien to them, they don’t care about reality trash and sporting rights are transient. Kind of like paying for digital news subscriptions. Broadcast TV will keep finding new lows as time goes on.
It’s also interesting to see internal-posterchild Stan – lauded as the low cost base high subscriber volume wunderkind – numbers laid bare here, with a shockingly low ARPU and $ contribution considering the prices are jacked up so regularly – a lack of consistent quality is surely to blame.
I’m sure many expected to see improvements after the 200 redundancies that “Meta forced them to make”, but a chronic lack of leadership and strategy, and toxic culture across the business looks to have taken hold.
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