Nine programs to return to WIN in new affiliate deal

Media billionaire Bruce Gordon will continue his push for a Nine Entertainment Co board seat after securing rights to air its programming in regional markets, in a move that triggered a steep fall in the share price of current affiliate Southern Cross Media.

Mr Gordon is Nine’s largest shareholder with a 14.94 per cent stake held in his investment vehicle Birketu. The deal will allow Mr Gordon’s WIN Corp network to broadcast programs such as Married at First Sight and The Block in regional markets. But the news hit shares in Nine’s existing regional broadcast partner Southern Cross Media Group, which closed 10 per cent lower at $1.97.

WIN TV owner Bruce Gordon is Nine’s biggest shareholder.Credit: Sylvia Liber

In a statement Mr Gordon said the deal “brings about an alignment between WIN’s broadcast business and Birketu’s investment business.”

Nine is the owner of The Sydney Morning Herald and The Age.

Under the terms of the deal, WIN will give Nine about 50 per cent of revenue made from regional advertising and will give also give the company airtime for promotion of its other assets such as radio stations 2GB and 3AW, streaming service Stan and its newspapers.

Southern Cross indicated to the ASX on Friday it had been blindsided by the deal. Nine was in an exclusive negotiating period with Southern Cross until the end of January before it began talks with WIN.

Nine provides Southern Cross with regional news bulletins under the existing arrangement, which is now expected to change. In an internal note to staff, outgoing Nine chief executive Hugh Marks said the company is now looking to redeploy more than 20 staff affected by the move.

WIN Corp currently has an affiliate deal with Network Ten and an arrangement to broadcast Sky News content in regional areas. Industry sources familiar with that deal, which expires in August, said the Sky News arrangement is unlikely to be renewed.

The Sydney Morning Herald and The Age reported that Nine had re-entered talks with WIN in early February. The two companies have a long history together but were unable to agree on commercial terms during the previous round of affiliate discussions. Mr Gordon wanted to return his affiliate deal to Nine because of its strong television ratings performance.

“While our relationship with Southern Cross has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine’s premium content into more regional markets under one agreement, and to work co-operatively with them on a national and local news operation, means this is the right time for us to return to WIN,” Mr Marks said.

Mr Gordon was a strong supporter of the strategy implemented by outgoing chief executive Mr Marks and was disappointed and frustrated that revelations of the CEO’s relationship with former executive Alexi Baker led him to resign. Sources said Mr Gordon wants to be represented on the board so he can have a view on major decisions made by the company. Nine recently appointed Stan boss Mike Sneesby as Mr Marks’ successor.

Southern Cross said in a statement on the ASX that it was looking forward to discussions with Network Ten to establish a new affiliate deal in regional Queensland, Southern NSW and regional Victoria. Nine shares closed 3¢ lower at $3.

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