Nine CEO Matt Stanton flags confidence in Domain sale
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The news: Nine Entertainment chief executive Matt Stanton has told investors he is confident that CoStar’s pursuit of Domain, which Nine controls with a 60% stake, will be finalised.
The context: Speaking at the Macquarie Australia conference, the Nine boss would not be drawn on what portion of the proceeds would be reinvested into the business and how large a war chest he would have to pursue targets in the Australian media market.
However, he did say he was confident the deal would close, delivering proceeds of about $1.4 billion to Nine, resulting in about $270 million in incremental franking credits and a strengthened balance sheet.
In a Q&A session, Stanton identified the Australian broadcast rights to Formula One as a possible target. He said the CoStar deal has not impacted Nine’s strategy but that the company was assessing targets and that Formula One, currently held by Foxtel, is the next sport up for negotiation.
What they said: “Well, Formula 1 is in market — I’ll just say it now because it is in market — that’s the one in market that’s probably the next biggest one [coming] up [for negotiation] at the moment,” Stanton said.
Asked if that’s something that would interest him, Stanton said: “Yeah, definitely; Formula 1, yeah. With [Oscar] Piastri doing what he’s doing — that will probably put the price up. I’m the only person cheering when he doesn’t win, actually.”
Nine flags uncertain outlook after mixed third quarter
The news: Nine Entertainment has posted a mixed third quarter for advertising revenue and said it expects the outlook for the rest of the financial year to be clouded by economic and market uncertainty.
The numbers: Total TV advertising revenue for the March quarter increased almost 8%, in line with the company’s expectations. Growth in Nine’s free-to-air revenue share and broadcast video on demand (BVOD) revenues more than offset a free-to-air market that is estimated to have been marginally down.
However, Nine Radio’s third-quarter broadcast advertising revenues were weaker than expected with a low double digits decline, while digital revenue grew by more than 20% on the prior corresponding period.
The context: The media conglomerate said while the federal election did bring some money into the advertising market in March and April, the current economic and market uncertainty is impacting the outlook for the balance of this financial year.
Total TV cost guidance for the year remains unchanged, with full-year reported costs, ex Olympics, expected to be broadly flat on FY24. Second half earnings growth at Stan is likely to exceed the 16% rise reported in the first half. Second-half earnings in Nine’s publishing business are expected to be broadly in line with the first half, with ongoing strength in digital subscription revenue and an improved second-half outlook on costs, broadly balancing the impacts of advertising seasonality.
Nine did not provide a trading update on Domain in view of the outstanding CoStar takeover proposal and ongoing due diligence process for the real estate classifieds business.
The sources: ASX, Macquarie Australia Conference
