Nine flags cuts amid ad downturn

Nine’s interim CEO has confirmed an internal restructure would involve job cuts across the media business, as his future remains undecided.

Nine interim CEO Matt Stanton. Picture: Nine

Nine Entertainment is looking to execute “cost efficiencies” of $100m across its various media assets over the next two years, as it confronts the structural decline of its free-to-air television business and the chronic weakness of the advertising market.

“As Nine continues its strategic and cultural transformation, there is expected to be further restructuring into H2 FY25 and FY26,” Nine said in its half-yearly results on Tuesday.

“These changes will be designed to ensure Nine’s optimal positioning into the future while also maximising the efficiency of our cost base.

“At this stage, Nine expects further cost efficiencies through to the end of FY27 of more than $100m, of which $10m-$20m is expected to be realised in FY25, in addition to the previous guidance of $50m in FY25.”

Nine's interim chief executive Matt Stanton confirmed the restructure would involve job cuts across the business. “There will be some impacts in roles. But, there also will be investment in people,” he said.

The half-yearly results were overshadowed by last week’s $2.6bn takeover bid by US company CoStar for Domain, the online real estate business in which Nine has a 60 per cent stake.

Domain’s earnings contribution in HI lifted to 15 per cent.

Mr Stanton refused to be drawn on Nine’s position on the CoStar bid, only saying Domain “remains a key part of our growth strategy”.

Asked about reports he met with CoStar founder Andy Florance in recent weeks before the company launched its takeover bid last week, Mr Stanton told The Australian: “I wouldn’t be doing my job if I’m not out meeting the right people across the industry.

“I have met Andy on a few occasions. And what I can say is that Andy didn’t inform (me of) this proposal from CoStar at all.”

Mr Stanton has been Nine’s interim CEO for five months, since former boss Mike Sneesby resigned in September, and is still considered the most likely candidate to be appointed to the position. But, the delay in the appointment of a full-time CEO has led to speculation the board might be considering an 11th hour candidate.

Nine CEO Mike Sneesby carrying the Paris Olympics torch in the Olympic torch relay. Picture: Jacquelin Magnay

Mr Stanton said he wasn’t frustrated by the extended selection process. “I’m just getting on with the job … and hopefully I’m successful,” he said.

Nine’s revenue for the first half came in flat at $1.39bn. Earnings before interest, taxes, depreciation and amortisation of $268m were down 15 per cent on the prior corresponding period, and profit after tax was down 29 per cent.

The ongoing weakness in the advertising market remained a concern for Nine, and the wider media industry, Mr Stanton said.  

“There’s no doubt the free-to-air ad market has been soft, very soft, over the last couple of years but … I would expect over the longer run total TV will be in a positive situation,” he said.

The total TV advertising market dipped by 5.4 per cent over the first half of FY25, principally driven by the metro free-to-air market, which experienced a 10.1 per cent decline in the six months to December 31.

Nine’s digital and publishing arm experienced a 7 per cent dip in revenue, with the division’s ­EBITDA slipping 4 per cent.

“Nine’s metro mastheads continue to be impacted by the softness in the broader advertising market as print advertising declined by 14 per cent, while digital advertising revenue proved more resilient, declining by 4 per cent across the six months to December 31,” the company said in its statement to the ASX.

Asked if the company was committed to sustaining its print assets, Mr Stanton was emphatic.

“I think people do genuinely like to pick up the print edition,” he said. Nine’s digital platforms now account for 55 per cent of publishing revenue.

Mr Stanton was coy when asked about speculation surrounding the sale of Nine’s radio assets, which include stations 2GB, 3AW, 4BC and 6PR.

“We’re focused at this point in time on driving the business forward,” he said, adding Nine was looking to “re-set” the division’s cost base.

Mr Stanton said the Paris Olympics exceeded expectations, with the Games making a cash profit for Nine — a rarity for an Australian broadcaster with the rights to the event, which is normally weighed down by exorbitant production costs.