Credit: Scott Graham via Unsplash
Nine Entertainment is working through a spreadsheet looking for savings of $100 million as part of a major restructure.
Details on where costs will be drawn from are thin. However, news and content production, marketing investment and the back end of streaming platforms are in the frame.
And the culture of the media group is top of mind, repairing the damage as outlined in a review which found a systemic issue with abuse of power and authority; bullying, discrimination and harassment; and sexual harassment.
The latest results, for the half year to December, showed revenue up just 1% to $1.39 billion for the half year, while net profit after tax fell 25% to $112.2 million.
Total television revenue was up 2% to $612.9 million, with streaming at 9Now offsetting the impact of a weak broadcast advertising market.
The media group is transforming into a digital-led business. About half of group revenue is now digital. Subscriptions and licensing makeup 31%.
Cost cutting pulled around $35 million from the books, part of a $50 million target (now expected to over deliver at $60 million to $70 million), and is separate from a new $100 million slice by the end of the 2027 financial year.
“We are reshaping the business in recognition of shifting consumption patterns towards digital video, a changing mix of short and long form content and convergence of delivery platforms,” said acting CEO Matt Stanton when briefing market analysts.
The plan is to shift from a platform-led to a “simpler, more consumer-led” operating model: "Using the power of the Nine Group, we will deepen our connection with audiences and advertisers by harnessing our unique data and premium content to drive growth."
Three units: Streaming & Broadcast; Publishing; Marketplaces
The creation of a streaming and broadcast division is the first step.
“Behind the scenes we will make better use of data, product investment and AR tools to create even more compelling experiences for our audiences and consumers across the group and create easier pathways between all the touch points in the Nine ecosystem,” said Stanton.
“Using the power of the Nine group, we will deepen our connection with audiences and advertisers by harnessing our unique data and premium content to drive growth.
“The program also includes a significant performance improvement element. We are focused on growth opportunities underpinned by continuing investment in a digital video market, a streaming first approach, a sharper focus on commercialisation, and an executive team aligned around group value creation.”
And costs are a focus.
“We are pursuing opportunities to materially reduce our cost base, such as streamlining our news production, rethinking our approach to content and marketing investment, and merging our tech stacks across streaming platforms,” he said
He expects these efforts to produce additional cost savings of more than $100 million primarily landing in the 2026 and 2027 financial years.
“At the same time, we intend to take this opportunity to transform both the culture at nine and as leaders in the industry the underlying cultural issues that have plagued the broader media sector in Australia for many years
“That is the role of us as leaders, and one which we fully embrace.”
Two-thirds of the recommendations of the October 2024 review report -- focusing on people and culture, leadership, policies, procedures and government, governance and diversity, equity and inclusion -- are complete or underway.
“The vast majority of our people are proud to work for nine,” he said.
“They think nine is well positioned in the media space and feel optimistic about our future. “We are incredibly proud of what our people have achieved this year, and I'd like to thank each and every one of them for their efforts. As we embark on this journey, we will build on the incredible strengths that have served nine groups so well for many decades.
“We will extend our leadership as a recognized creators of experiences that matter most to our audience members and consumers, the news, sport and local entertainment highlights that shape who we are as Australians.”
Stanton said the cost cutting is strategic also granular.
“We have got a spreadsheet, line by line, where we go through every area of the business,” “The assets we have at the moment we're very happy with. At Nine, we're always reviewing them to making sure we progressing them as much as possible.”
The strategy as outlined in a presentation slide delivered to market analysts:
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