Nine Entertainment seeks buyer for stake in Stan streaming service

Sources say Nine faces greater pressure to find a solution for Stan in an increasingly competitive environment.

Nine Entertainment is understood to have asked NBCUniversal whether it is interested in buying into its streaming business Stan.

It comes amid speculation that Nine has renewed efforts to offload a stake in Stan in recent weeks, with many suspecting that the free-to-air broadcasting, digital and publishing company is looking for a content-for-equity swap with a major Hollywood production house.

Sources said recent meetings in Los Angeles, led by Nine’s boss Mike Sneesby, extended beyond content deals with production houses to broader strategic options.

Nine has never said it is a seller of Stan, but it was known to be willing to sell under the leadership of Hugh Marks, who left last year.

Stan recently lost a content deal with NBCUniversal, which signed up with Foxtel, owned by The Australian’s publisher News Corp, and Seven West Media.

It was also the underbidder in the recent contest for the AFL media rights that were retained by Foxtel and Seven.

Sources say Nine faces greater pressure to find a solution for Stan in an increasingly competitive environment.

Analysts says its subscribers have peaked at 2.5 million, and paying up to broadcast sporting codes is a costly exercise.

The streaming service got off to a flying start in the Australian market, being the first local streaming service to launch in 2015, and analysts say Stan has been well run.

But the market has since become far more competitive, with rationalisation and consolidation seen as inevitable.

Operating in Australia now are Netflix, Amazon Prime, Disney+, Foxtel’s streaming service Binge and the CBS streaming service Paramount+, while Seven is building out an advertising-supported digital on-demand streaming service.

For a buyer, the attraction would be a launch into the Australia market with existing subscribers, which may be cheaper than the cost of investment for organically growing a subscriber base.

Stan is making about $28.5m annually but was previously predicted to make about $100m.

Nine has a longstanding relationship with Jefferies Australian CEO Michael Stock for investment banking deals.