Matildas bring ‘halo effect’ for Seven but commercial windfall limited

Seven West Media boss James Warburton has toned down expectations of how much the network has benefitted from the success of the Matildas, despite enjoying record-breaking ratings and a broadcast deal that cost the network less than $5 million.

While Seven’s coverage of the FIFA Women’s World Cup has galvanised the public, Warburton on Wednesday said the broadcast of Matildas’ games had been “limited in terms of commerciality”.

Seven West Media chairman Kerry Stokes and chief executive James Warburton.Credit: James Alcock

Any uptick in Seven’s profits, according to Warburton, was largely limited to cross-promotion of its other programs to lift audience numbers and advertising yields.

“There are no ads during play, during extra time, and during penalty shootouts,” he said, with Saturday’s quarter-final against France commercial-free for the more than 90 minutes of coverage after the half-time break, despite its audience of near 5 million.

Warburton’s cautious commentary came after billionaire Kerry Stokes’ media conglomerate, which owns the Seven Network and The West Australian newspaper, posted a 30.8 per cent slump in full-year net income to $146 million. Revenue for the period slumped 3 per cent to $1.5 billion.

Warburton said Seven’s numbers had held up in a “challenging market”, with total TV (metro, regional and broadcaster video on demand) ad revenue down 7.9 per cent across the year. The media company will keep its dividends on hold for a 12th successive reporting period, citing the market conditions.

Seven West’s share price dropped 7 per cent to 37¢ shortly after, recovering slightly to 38¢ by the afternoon.

The network’s ability to capitalise on the Matildas’ success was scotched by rules imposed by FIFA, which obliged Seven to sell ad space only to the footballing body’s eight chosen partners, as well as two more from Football Australia.

Package prices were fixed before the tournament, preventing Seven from further cashing in on the stellar run of the Matildas and the subsequent swell in public support.

The conditions imposed by FIFA have instead been a boon for the sporting body’s advertising partners – including Adidas, Hyundai, Rexona, Qantas, Cadbury, Coca-Cola, Kia, McDonald’s, Visa and Xero – with 11.9 million broadcast viewers, plus the 2.3 million streaming viewers Seven says the tournament has reached to date.

However, the halo effect across the rest of Seven programming has been positive, with Seven News audience numbers rising, and Seven’s singing entertainment show The Voice – timed to compete with Nine’s home renovation series The Block – also pulling high numbers. Both shows kicked off on August 6. Nine is the owner of this masthead.

Warburton also used Wednesday’s results presentation to sink the boot into Paramount-owned Network Ten, saying that Australia’s TV sector was now a two-player market, a comment the international owner of Network Ten said was “nothing more than a deflection”.

Warburton took aim at the “third network”, saying Ten was “evaporating relatively quickly from a share perspective”, and “falling by the wayside and getting weaker”.

Most of that 1.5 per cent market share will come from Ten, Warburton noted, with Seven’s audiences “consistently double their audiences”.

In the television ratings war, audiences are one thing. But that means nothing if the dollars aren’t coming in.Credit:

“There is a fight at the top end of town that we are winning quite comprehensively,” he said.

Warburton’s comments drew a strong rebuke from Paramount. “The comments made by a competitor this morning are nothing more than a deflection and reflects a business strategy that fails to recognise how media companies are diversifying both domestically and globally,” a Paramount spokesperson said.

“Paramount is a diversified global business with a strong domestic footprint and audience base across linear TV, multi-channels, broadcast video on demand and Paramount+ streaming.”

Paramount said its imminent launch of new advertising video on-demand product, Pluto TV later this month would strengthen its offering to the market.

“We have also just won five TV Week Logies Awards, more than any other commercial broadcaster, validating the quality of our content and popularity of our shows.

“We understand our competitors would like to see otherwise, but we are confident of our unique offering to the market and we will continue to entertain Australian audiences with fabulous locally produced content and through Paramount’s unrivalled global content pipeline.”

Data compiled by KPMG for industry body Free TV Australia in January showed Ten’s total TV revenue share (metro, regional and online streaming) in the second half of 2022 was about 20.5 per cent, significantly less than Nine (40 per cent) and Seven (39.5 per cent).

Ten’s share previously being closer to 25 per cent.

Figures reported by Think TV this week showed the total TV market recorded $3.6 billion in revenue for the year ending June 30, down 7.9 per cent on the corresponding year. Considering just the first six months of 2023, total revenue was down 11.8 per cent, with linear metro revenue down more than 15 per cent, slightly offset by growth in the broadcast video on-demand sector, totalling 6.9 per cent.

Optus Sport, despite not gaining the significant reach Seven has been able to achieve, is also a likely winner of the Matildas’ success, after Optus sold on the free-to-air rights to Seven for 15 Women’s World Cup games, jointly selling the advertising rights to those games.

“It is rating its socks off, but let’s be honest ... no one expected it,” one media agency boss said this week. “It has over-delivered, emotionally and rationally.”

Starcom media agency chief Nick Keenan said “everyone is blown away” with the results, with clients such as Visa, which his agency buys media space for, “having an incredible time”.

Keenan said the market had been hard to convince to back women’s soccer, yet Visa, a long-standing FIFA partner, was “reaping the benefits”.

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