Major blow for Nine as profits plunge and hundreds of roles are axed as TV bloodbath continues
Full-year profit at media giant Nine Entertainment has fallen by almost a third to $134.9 million as the media giant cuts costs by cutting hundreds of positions.
Figures published by the company on the stock exchange on Wednesday show that net profit fell by 31 percent up to and including June 2024.
Nine owns some of Australia’s largest media platforms, including Channel Nine, streaming service Stan, talk radio stations 2GB and 3AW, The Sydney Morning Herald, The Age and the Australian Financial Review.
Revenue was $2.6 billion, down 3 percent, while earnings before interest, taxes and depreciation (EBITDA) was $517 million, down 12 percent.
In June, long-time chairman Peter Costello announced he was leaving the company after an altercation with a journalist at Canberra airport.
New Chairman Catherine West said in a statement that the company is performing well in a challenging market.
CEO Mike Sneesby, who came under fire from employees when he carried the Olympic torch in Paris, agreed with her.
βIn a year of challenging economic and advertising market conditions, there were some clear positives in this result,β he said.
Profits at media giant Nine Entertainment have fallen by almost a third to $134.9 million for the year. Pictured are Nine hosts Karl Stefanovic and Sarah Abo, who were not affected by the job cuts
At digital streamer Stan, EBITDA rose 24 percent to $46 million, while profit at real estate website Domain rose 26 percent to $137 million.
It was a different story for Nine’s larger TV and publishing divisions, with EBITDA for the TV division down 32 percent to $208 million, publishing profit down seven percent to $153 million and audio profit down a third to $8.4 million.
In the current financial year, Nine has enjoyed a large audience and revenue across platforms thanks to its coverage of the Paris Olympics. The network also covers the Paralympic Games, Sneesby said.
Coverage of the Paris Games reached an unprecedented national daily audience of nearly 10 million people on average.
Nine has spent $305 million to secure broadcast rights to the Olympic Games, including the 2032 Games in Brisbane.
While revenue from games’ advertising and subscriptions is expected to total more than $160 million, the company expects the business to break even.
Nine has cut costs by $65 million by 2023/24 and announced in June it would cut 200 jobs, about four percent of its nearly 5,000 workforce.
βOf our national team of almost 5,000 people, approximately 200 jobs in Nine are expected to be impacted, including a number of vacancies and temporary roles that will not be filled,β Sneesby said earlier this month.
Nine announced hundreds of job cuts earlier this month
Nine suffered a major profit drop, but CEO Mike Sneesby is pleased with the increase in Olympic attendance
‘To continue investing in digital growth opportunities within Negen, we need to manage costs responsibly throughout the cycle.’
The leading news and current affairs program, which also included 9News and 60 Minutes, is cutting 38 jobs.
In addition, 90 jobs will be cut at Nine’s publishing division. These include jobs at The Sydney Morning Herald, The Age and The Australian Financial Review.
The cuts came after a commercial deal with social media giant Meta, owner of Facebook and Instagram, expired.
According to CFO Matt Stanton, Nine expects to reduce underlying costs by a further $50 million by the 2025 financial year, equating to cost savings of around $100 million over two years.
In July, Nine Mastheads workers went on strike for five days over wages and working conditions during company agreement negotiations.
The strike also followed a controversy in May over Nine’s handling of historical complaints against former news director Darren Wick.
Mr Sneesby acknowledged the public comments about the company’s culture and promised the issue was being taken “extremely seriously”.
Meanwhile, Nine is in discussions with major AI platforms about the use of its content and has updated its websites to prevent AI platforms from using the content without permission, Sneesby said.
The company has also decided not to continue its share buybacks.
Nine spent $68 million on share buybacks in 2023/24, taking total spending to more than $220 million over two years, Mr Stanton confirmed.
A full dividend of 4.5 cents per share will be paid on October 24.
Nine stocks are trading around $1.34 and were above $2 in August 2023.