Pregnant with possibilities: Why Nine is primed for change this year

If any company exhibits the preconditions for change in 2025 it would have to be Nine Entertainment. Firstly, the company has initiated a strategic review. Secondly, one of Australia’s best known investor agitators, John Wylie, has stealthily built a shareholding. But perhaps most importantly, Nine’s share price is wallowing in a slump.

The company is now pregnant with possibilities and the biggest corporate guessing game in town is what will be born from the changes at Nine.

Wylie’s Tanarra Capital has a storied history of buying into unloved companies and pushing for change in strategy and/or management, so this entrance cannot be ignored.

Nine’s interim boss, Matt Stanton.Credit: Dominic Lorrimer

Additional change impetus is derived from Nine’s current state of fluid governance. Its most recent permanent chief executive, Mike Sneesby, left the building at the end of last year, leaving an interim replacement, Matt Stanton, who is clearly keen to demonstrate that he has the bona fides to overhaul the shape and performance of Nine (which owns this masthead).

Stanton has not yet been named successor, so his review of the operating assets feels a lot like his audition for the top job.

Meanwhile, Nine has a small board headed by Catherine West, one which is attempting to scrub off the odour of the company’s cultural shortcomings that came to light in 2024 but had been festering for years.

So an overhaul of the board, or at least the appointment of some additional directors and potentially a new chairman, are all the subject of corporate chatter.

A report in the Australian Financial Review that media executive Amanda Laing is likely to be appointed in a new role overseeing Nine’s broadcasting operations shows the potential for more change in the executive ranks.

Needless to say, it is no coincidence that Nine’s performance issues, particularly in broadcast television, have been exposed during a period of weak advertising that has been evident across the industry.

And while the term “strategic review” could mean anything, including further cost-cutting, in finance circles it is usually code for asset sales.

Given Nine is now a media conglomerate that owns the lion’s share of digital real estate business Domain, a free-to-air broadcast network that includes its digital video-on-demand services, a radio network, publishing assets and streaming service Stan, there are numerous opportunities to reconfigure the company’s stable of assets.

Whether everything or anything may be on the disposal block depends on whether there remain any sacred cows.

Publishing and broadcasting bring in the bulk of the earnings, so jettisoning either would seem less likely. While these are both traditional media assets that have been structurally compromised, the overhaul of publishing to an online-driven business generating strong subscription revenue has allowed it to evolve into one that can grow its earnings even as it competes for eyeballs with the social media giants that dominate in the market for younger audiences.

Nine’s digital channels such as 9Now have grown in popularity with audiences even as linear viewers have been in structural decline. But television is a costly business and addressing the structural decline in audiences and advertising is a challenge that no broadcaster around the world has been able to surmount.

This makes finding a buyer prepared to pay up a formidable problem.

Streaming service Stan was once the great hope for Nine, but it has had to contend with an increasing number of competitors that are now crowding this space. It did well in its early years to build a solid subscriber base which it has managed to retain. But the giant in this space, Netflix, is the only service that is a must-have for viewers.

At the end of last year, Rupert Murdoch’s News Corporation raised the white flag when it sold its Foxtel business - which included streaming service Binge and sports streamer Kayo.

Nine’s radio assets are dominated by talkback stations that appeal to an older and more politically conservative demographic and there has been speculation that they are no longer considered core assets.

That said, the money generated from selling radio would barely move the dial for Nine.

Real estate portal Domain, which is separately listed and in which Nine has a 60 per cent stake, would appear like the most obvious contender.

Its share price has fallen more than 20 per cent over the past year in stark contrast to its major competitor, the Murdoch-controlled REA, whose share price has gained 36 per cent over the same period.

There are plenty of punts on what might happen at Nine, but it’s a good bet that something will.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.