Interesting article in today’s Australian.
Nine released its profit results today
Nine Entertainment has reported an after tax net profit for 2016 of $120m, down 7% from last year, with the network describing the performance of its core, free-to-air business as “disappointing”.
Nine said revenue fell 6.5% to just under $1.2b, with group earnings before interest and tax falling 7.1% to $201.7m.
Also of interest is the announcement that the network as reached an in principal agreement to terminate the “life of series” obligation it had to purchase Warner Brothers product.
After a $46m ‘specific item’ relating to Nine’s ‘life of series obligations’ with Warner Bros – an agreement which obliged Nine to buy US drama and comedies no matter how they performed in the local market – after tax profits sunk to only $74m.
Nine said it has reached an in-principle agreement to terminate the deal.
NEC posts $120m profit for 2016
NEC today posted its full-year results for the 2016 financial year, which highlighted a year of tightly managed costs and a commitment to increasing premium local content in 2017 by 50 per cent.
NEC reported Revenue of $1.282 million, Group EBITDA of $202m and Net Profit After Tax of $120m from its continuing operations. On a statutory basis, which included profit on the sale of Nine Live, Net Profit After Tax was $325m.
Highlights for the year include:
- Completion of new landmark affiliate deal with Southern Cross Media
- Increased cost discipline across each division, with group cost performance ahead of guidance
- Video streams up 14 per cent to more than 392 million, ranked #1 Australian publisher1
- Launch of state-of-the-art streaming and catch-up service 9Now and fourth channel, 9Life
- Stan joint venture established as the leading domestic SVOD player
- Double-digit EBITDA growth from a refocused digital business
- 4.0 cent fully franked final dividend for a FY16 total of 12.0 cents, up 30 per cent year-on-year
Over the year, Nine Network’s reported costs decreased by $62m (6.2 per cent). Inclusive of the total Warner Bros. costs, costs were down by 2.2 per cent. This reduction was delivered despite a contracted increase in sports costs, legal fees which were around $7m higher (relating to litigation with Channel 7, WIN and costs associated with the 60 Minutes Beirut story), as well as investment in the launch of the new 9HD and 9Life channels.
Nine also announced today that it has reached an agreement with Warner Bros. in relation to the life of series obligations. This agreement results in Nine exiting these obligations and provides increased flexibility in relation to future content spend.
CEO Hugh Marks said: “As a business we are incredibly focused on regaining momentum in ratings and revenue, with a well advanced content plan for 2017. The combination of our free-to-air, SVOD, AVOD and other digital assets is unique in this market and provides a strong platform for us to meet the changing needs of our audience and customers in the future.”
So Nine is exiting the Warners deal that gives it many many hours of content for 9Gem and 9Go!. That will leave a massive programming hole they’ll have to fill.
Warner Bros’ local arm is now making shows for other networks (e.g. The Bachelor/ette, First Dates) which makes the output deal with Nine irrelevant anyway.
That’s not what that sounds like - it sounds like a specific part of the deal is being dropped. I’d assume Nine still would have all the rights to what they want, just without the compulsion to purchase the whole lot - perhaps with an offsetting higher cost for acquiring the stuff they do want.
Shares were up early in trade (4.9%) but have since retreated back to be up 0.98% for the day.
They already exited the WB deal a while back but kept WB shows they had acquired under that deal. This latest announcement appears to me to mean they won’t even keep those shows anymore? Maybe not even The Big Bang Theory? So you’re right this will leave a big hole especially for 9Go! and all those kids shows.
Not sure where to post this, but Nine has just put on Twitter that during The Block tomorrow, there will be “a special Channel Nine announcement” with what looks to be a doctor looking down on a newborn child, with Blondie’s “Heart of Glass” as the song in the background.
Channel 9 @Channel9 9m9 minutes ago
TOMORROW during @TheBlock…
SPECIAL ANNOUNCEMENT | SUNDAY 7.00pm
Baby being born - new channel alert?
yeah it’s looking down on a patient… I was wondering the same thing.
My guess is that it might be Love Child-related, judging by the music/footage used.
Embarrassing Bodies Australia?
Heart of Glass was 1978, so it may be.
Now this is vital marketing. Love it.
Wonder what it could be
Something to do with their new on-air look?
That promo had a PG rating, so appears it for a program not a new channel or a graphics update.
I believe it’s for Doctor Doctor, the Telegraph says Nine is so proud of it it is rushing it to air on Wednesday 14th September.
Nine sent out a presser this morning about Doctor Doctor - the highlights below
After a spectacular fall from grace, high-flying heart surgeon Dr Hugh Knight (Rodger Corser) receives a life-changing punishment from the Medical Tribunal – he is forced to work for a year as a country GP in his former home town of Whyhope.
DOCTOR DOCTOR follows Hugh’s attempt to rebuild his world in the town he has spent his whole life running away from. Now the only way to salvage his brilliant career is to work as a lowly GP in an under-resourced, small-town hospital surrounded by estranged family, former friends, crazed colleagues, oddball patients, jealous brothers and a newlywed ex-girlfriend.