Nine chief Mike Sneesby announces further cost-cutting

Nine Entertainment will look to make “structural” cost cuts across the company this year, as the heightened economic uncertainty continues to bite into the media giant’s bottom line.

Nine chairman Peter Costello and chief executive Mike Sneesby.

Nine Entertainment will make “structural” cost cuts across the company this year, as the heightened economic uncertainty continues to bite into the media giant’s bottom line.

Speaking at the Macquarie Australia Conference a day after Nine’s trading update, chief executive Mike Sneesby said the further cuts would be on top of the $20m in savings that had already been found in the business this financial year.

“That started in the first half. And it started with us pre-empting what we thought would be a slowdown in the consumer sector,” Mr Sneesby said.

“It really becomes people and content where we have an opportunity to tighten up costs and we have tightened those this year.

“In terms of one-off all underlying costs – and we will make some cost reductions structurally as we head into FY24 given the uncertainty – again, those tend to be across a range of areas but primarily the flexibility comes in people and content.”

In a trading update on Wednesday, Nine forecast a 15 per cent decline in the free-to-air television market for the final quarter of FY23, with the slump in TV advertising likely to bleed into the next financial year.

In his note to the ASX, Mr Sneesby said the market’s sluggish ad cycle was the by-product of a weak economy, and the ongoing uncertainty meant the industry had “limited visibility” of a rebound.

He said television costs were expected to increase “in the low single digits” in the second half of FY23, and would be “slightly below” 7 per cent for the full year.

On Tuesday, Seven West Media chief executive James Warburton said his company also planned to cut up to a further $20m in costs to cushion the decline in advertising revenue.

Nine shares lost 1 per cent, or 2c, to close at $2.01 and Seven West sales fell 4 per cent, or 1.5c, to 37c.