Nine to give back $2m in jobkeeper payments after posting $182m profit

Departing CEO reports 53% profit rise from digital businesses while revenue from mastheads including Sydney Morning Herald and the Age falls 9%

Nine Entertainment’s outgoing chief executive, Hugh Marks, has pledged to give $2m in jobkeeper payments back to the government after the nation’s biggest local media company posted a $182m net profit.

“This is a remarkable reflection of a period where much of Australia spent time in lockdown, or recovering from lockdown, and the Australian economy was in recession,” Marks told staff.

“In the face of this, we’ve reported a 42% increase on last year in earnings before interest and tax of $355m and a total revenue of $1.16bn for [the first half of the financial year].”

In his final results presentation after five years leading Nine, Marks said the multi-media company had resumed talks with Facebook, and was continuing talks with Google, for the digital giants to pay for its news stories. It is understood Nine’s deal with Google is worth $30m a year.

Live Now: Nine CEO Hugh Marks and CFO Maria Phillips are currently presenting the H1 FY21 results - watch here:

— Nine Comms (@9Comms) February 23, 2021

The Nine results were delivered the day after Facebook reversed its ban on Australian news on its platform after coming to an arrangement with the government on the news media bargaining code.

Nine said: “We are pleased the government have found a compromise on the digital code legislation to move Facebook back into the negotiations with Australian media organisations.”

The jobkeeper payments did not go to the company’s newspaper or television divisions but to youth website Pedestrian and Nine Events, including the Night Noodle Markets, Good Food events and Australian Financial Review events.

Marks told staff at the Sydney Morning Herald, the Age and Channel Nine in an email that the deal with the digital platforms would provide a “guaranteed annuity-type payment that will underpin our journalism and further drive the evolution of our business”.

He signalled that the digital side of the business was the future as there had been a 53% improvement in profit from the digital businesses to more than $140m.

“These operations include video on demand, the subscription TV service Stan and subscriber services in news titles such as the Sydney Morning Herald and the Age,” Marks said.

TV advertising for hit shows like Married at First Sight remained the biggest revenue source, while print advertising was down 25% to $48.1m due to Covid-19, which affected travel and luxury advertisers.

Nine again dominated last night across the share. It had the most watched primary channel (26.6% share), and network (34.9% share) on Tuesday night and dominated all the key demographics.

— Nine Comms (@9Comms) February 23, 2021

“The advertising market clearly turned in late September, earlier and more sharply than we had anticipated,” Marks said.

The mastheads, including the Sydney Morning Herald, the Age and the Australian Financial Review, experienced a 9% decline in revenue to $263.4m but digital subscriptions and licensing revenue was up 26% to $51.9m.

Cost-cutting decisions included no longer funding wholesale news provider Australian Associated Press, which AAP’s other major shareholder, News Corp Australia, also dropped.

Video-on-demand services were expected to grow sales strongly through the second half. The improving sales in digital publishing were expected to continue, as was subscriber growth for Stan.

Radio advertising is a small part of sales for Nine, and while its levels were low in the first-half, the company tipped it to improve in the second half.

Marks will remain in his position until his successor is chosen.

Shareholders will receive an interim dividend of five cents a share, fully franked. This was the same as the previous interim payout.


Amanda Meade and Australian Associated Press

The GuardianTramp

Related Content

Article image
Google and Facebook: the landmark Australian law that will make them pay for news content
Despite protestations from both companies, the Australian parliament is set to pass legislation it says is needed to boost public interest journalism

Amanda Meade

16, Feb, 2021 @1:01 AM

Article image
Why is Google taking aim at the Australian government with saturation advertising?
Google and Facebook are deeply opposed to the Australian government’s plans to force them to pay media companies for news content

Josh Taylor

19, Aug, 2020 @5:30 PM

Article image
Facebook and Google must be held to account, TV networks say
Australian TV lobby says digital giants do not ‘contribute in any meaningful way towards cost of the content they monetise’

Amanda Meade

20, Apr, 2018 @11:05 PM

Article image
Google and Facebook to push hard against proposal for regulatory body
Australian Competition and Consumer Commission considers market position of Google and Facebook justifies greater oversight

Anne Davies

13, Dec, 2018 @5:00 PM

Article image
News Corp backs push for ABC and SBS to receive payments from Google and Facebook
Greens and Labor have said they will not support proposed mandatory news code legislation unless public broadcasters are included

Amanda Meade

02, Oct, 2020 @6:40 AM

Article image
Facebook reverses Australia news ban after government makes media code amendments
Treasurer Josh Frydenberg announces a compromise has been reached at the 11th hour as the legislation is debated in the Senate

Amanda Meade, Josh Taylor and Daniel Hurst

23, Feb, 2021 @4:57 AM

Article image
Competition watchdog expects Google and Facebook to strike deal with small publishers
News media bargaining code passes Senate after government reaches 11th-hour agreement with Facebook

Amanda Meade and Josh Taylor

24, Feb, 2021 @8:39 AM

Article image
Google and Facebook using lobbyists with close ties to Morrison government to fight media code
Former prime ministerial staffers among those working for influential lobbying firms used by digital giants to try to quash proposed legislation

Amanda Meade

09, Feb, 2021 @2:29 AM

Article image
Backers of Australia's mandatory news code welcome French ruling on Google
Paris court orders the tech giant to discuss compensation with publishers for using content in search results or on Google News

Amanda Meade

09, Oct, 2020 @7:00 PM

Article image
ABC can keep Google and Facebook payments for news, Coalition says
Government won’t reduce public broadcaster’s funding over potential windfall from new media code, communications minister vows

Amanda Meade

08, Dec, 2020 @8:15 AM