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.
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.
“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.