Nine suspends titles as advertisers pull back

Newspaper sections scaled back, magazines halted and staff forced to take leave as advertisers pull back.

managing director of publishing at Nine Chris Janz. Picture: Kym Smith

Nine Entertainment is cutting its newspaper operations by suspending a string of newspaper sections and magazines, including Domain and BOSS, as well as forcing staff to take leave and suspending bonuses, as advertisers slash spending during the coronavirus pandemic.

Nine managing director of publishing Chris Janz has told staff at newspapers including The Sydney Morning Herald, The Age and The Australian Financial Review there had been “significant advertising cancellations that would force sections and magazines to be suspended to secure the future of our business”.

“Unfortunately we are not immune from the unprecedented economic and advertising downturn caused by the crisis,” he said. “While subscriber numbers are building, the growth does not offset the significant number of advertisers cancelling or reducing spend,” Mr Janz said in an email to staff.

The difficult advertising market conditions come 15 months after Nine’s $4bn merger with Fairfax Media, which consisted of a stable of metropolitan and regional newspapers, plus majority stakes in digital real estate group Domain and radio group Macquarie Media, plus a 50 per cent shareholding in streaming service Stan.

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Nine shares were up nearly 17 per cent to $1.22 Tuesday lunchtime following news of the company’s cost-cutting measures.

Mr Janz said Nine would be reducing the size of some print products and sections and suspending publication of The Australian Financial Review’s BOSS magazine, as well as the Sophisticated Traveller and Luxury titles. The Executive Style and Traveller lift-outs were also to be suspended, as well as Good Food magazine.

A Nine spokeswoman confirmed that its Domain magazine and real estate listing guide will also to be suspended this weekend, plus The Shortlist and EG event guides.

“Like most businesses, Nine is examining its business in light of the COVID-19 outbreak and its impact upon the advertising market and is taking a number of steps including the suspension of certain print sections,” she said.

“These temporary measures will be continually reviewed and the sections will be reinstated as conditions improve. Impacted staff will be redeployed as appropriate.”

Mr Janz told staff Nine was also “reviewing all vacancies and only progressing with critical roles”, suspending all bonuses and incentive schemes, reducing casual and contributor spend, and limiting the number of editions published each day.

Staff with more than eight weeks annual leave are being asked to take leave immediately and all staff were asked to submit their leave plans for the 2020 calendar year.

The announcement came just a day after Nine told the market it was targeting cost savings of $266m this year and fast-tracking $100m in cost cuts from its free-to-air broadcast business.

After dumping annual earnings guidance earlier this month, Nine said it was “focused on major short and long-term cost initiatives across all of its businesses”, including big savings from its marquee sporting event, the National Rugby League.

Nine also said its third-quarter revenue was in line with its previous guidance. However, the advertising market was “increasingly uncertain with likely material negative impact from April”.

No specific details about the ad downturn were released.

Of the $266m in cost savings identified, Nine said it expected $102m to be delivered in the six months to June 30 and the remainder in the second-half of 2020.

Nine has identified $130m in broadcast savings if the NRL 2020 season is cancelled, of which will be equally booked in the 2020 and 2021 financial year.

Mr Janz thanked staff for their work during the COVID-19 crisis. He said newsrooms would be “appropriately staffed” and would continue to print newspapers and publish the SMH, Age, AFR as well as Brisbane Times, WA Today, and Nine.com.au online.

“These are not decisions we take lightly but are absolutely necessary to sustain our operation.”

News Corp Australia (publisher of The Australian) also announced last week that it will be reducing pagination as well as forcing all senior executives to take pay cuts and ask staff to take annual leave where possible.