Axe swings at Seven West Media with 150 jobs to go

The Kerry Stokes-controlled Seven West Media will make up to 150 jobs redundant as it grapples with a weak advertising market and braces for the end of a lucrative commercial deal with Meta.

The cuts come after the network flagged further cost-cutting exercises in February, by then-chief financial officer Jeff Howard and former chief executive James Warburton.

Howard, now elevated to chief executive officer, will on Tuesday inform staff of the company-wide cuts, according to a source with direct knowledge of the decision not authorised to speak publicly.

Seven West Media will make up to 150 staff redundant.Credit: Viki Lascaris

Seven West owns the Seven Network and the Perth-based newspaper The West Australian. Seven’s spokespeople did not respond to a series of questions.

The job cuts are not limited to any one division, with journalists from the television and print divisions, sales and marketing staff, as well as some printing staff to be cut. Seven West was contacted for comment.

Applications for voluntary redundancies at The West Australian, which is a requirement under the paper’s employee bargaining agreement opened for editorial staff last week.

Last week, Howard told a parliamentary inquiry into social media that the network would need to find cost efficiencies should the revenue from its commercial arrangement with Meta dries up this year.

“The funding has been used to fund the entire news operation and investment in platforms and content. So we’ll be looking across the board if this funding is not available,” Howard said.

News Corp, meanwhile, has already begun a cost-cutting restructure, which has resulted in a significant number of redundancies.

Seven West’s commercial deal with Facebook and Instagram’s owner Meta, estimated at $15 million annually, will expire at the end of this week. It will be impacted more severely by the end of the deal compared to its peers, Nine and News Corp, according to a recent note from E&P Capital analyst Entcho Raykovski.

In the note, Raykovski estimates Seven’s EBITDA (earnings before interest, taxes, and amortisation) to suffer an 8 per cent hit.

Seven is also more exposed than its counterparts to weaker market conditions, with free-to-air television advertising accounting for nearly 90 per cent of its total revenue.

Jeff Howard, Seven West Media CEOCredit: Alex Ellinghausen

The ad market continues to struggle, with Guideline SMI figures (the global benchmark for advertising demand) for April showing the market was down 10.4 per cent overall compared to the same period in 2023. Revenue across calendar year 2023 was also down 10 per cent compared to the year prior.

Morningstar analyst Brian Han, in an update on Seven released last week, noted that the structural challenges facing the free-to-air television and broadcast video-on-demand industries are likely to prevent any lasting improvement in Seven West’s margins.

Those challenges, he said, are fuelled by the increased competition for viewers and advertising dollars.

“At current prices, the market is even more pessimistic about Seven than when the COVID-19 tornado first hit,” Han said.

Meanwhile, Seven’s new news and current affairs boss Anthony De Ceglie has begun an overhaul of the company’s news leadership team. De Ceglie has appointed fresh news directors in Melbourne, Sydney and Adelaide, alongside a new director of news operations and new executive producers for Sunrise, Weekend Sunrise and 7News Spotlight.

He was appointed less than two months ago, replacing company veteran Craig McPherson, who left following Seven’s Spotlight scandal involving Bruce Lehrmann.

Several senior journalists have also left the company, including Cameron Baud, Robert Ovadia and Andrew Frampton.

Ovadia’s exit has drawn significant attention, after taking leave at the start of June as the company investigated an allegation of “inappropriate behaviour”. He was sacked by the company last week.

Seven’s share price opened the week at 18¢ on Monday. It is down 54 per cent across the past 12 months.

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