TV ‘can’t get free pass’ on cost control: Ryan Stokes
The nation’s big broadcasters are feeling the brunt of an advertising downturn and are being forced to respond.
All businesses need to keep a sharp eye on costs in a high inflation economy – and television is no exception, says Ryan Stokes, who controls the biggest stake in the under-pressure broadcaster Seven Network.
His comments come as both Seven and arch rival Nine have outlined aggressive cuts, with Seven targeting a wholesale management and newsroom shake-up under new chief executive Jeff Howard. Seven’s plans, involving the loss of about 150 jobs, are designed to save $100m in annual costs.
Nine, meanwhile, has outlined plans in recent weeks to cut as many as 200 jobs across TV and publishing as it battles a broader advertising downturn.
Stokes’ ASX-listed Seven Group controls more than 43 per cent of Seven West Media, the company that also owns The West Australian newspaper. Ryan’s father billionaire Kerry Stokes is chairman of both Seven West and Seven Group.
But with a value of just $260m, the television network represents just a tiny part of the Stokes’ financial empire.
By comparison Stokes’ head company Seven Group is valued at more than $15bn and controls companies across mining, energy, construction and from Thursday, building materials group Boral.
“Cost focus is not new, and I think every business in this environment needs to have a strong discipline on continuing to rationalise costs where possible,” Ryan Stokes told The Australian. “From a media perspective, that’s no different”.
Seven West needed to refine its cost base “to be relevant for the current market, as well as ensure the businesses is positioned for the future”, Stokes said. The key for Seven West will be for it to capitalise on its digital platforms, he adds.
Stokes says he remains confident in the outlook for Seven West and gave his backing to Howard’s overhaul, marking the first time he has commented on the shake-up. The Seven restructure also involves splitting the media business into three categories – television, digital and WA.
As chief executive of Seven Group, Ryan Stokes has pushed ever deeper into large-scale industrial companies. That has spurred on persistent talk in media circles the broadcasting operations could be up for sale.
For his part Stokes says he still sees opportunities in the media business, particularly if it can build out its digital ambitions.
“We’d like to see a position where the business would get back to delivering earnings growth, but that’s going to take time and effort and a lot of focus on how we continue to revise the operating model.
“If we execute on that, we should see a value opportunity increase”.
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