Seven West Media CEO James Warburton eyes extension of AFL TV rights

Seven West Media chief executive James Warburton believes the network is well-placed to extend its lucrative TV rights deal with the AFL.

Seven West Media CEO James Warburton. Picture: Nikki Short

Seven West Media chief executive James Warburton says the network is well-placed to extend its lucrative TV rights deal with the AFL, after announcing a further upgrade in trading expectations on Wednesday.

In a presentation at the Macquarie Australia Conference in Sydney, Mr Warburton said Seven’s improved earnings outlook was the result of a strong post-Covid bounce-back in TV advertising, the acquisition of the Prime Media Group earlier this year, and the record growth of its broadcast and digital assets, especially BVOD (broadcast video on demand) streaming service 7plus.

Seven West Media forecast its EBITDA (earnings before interest, taxes, depreciation, and amortisation) to increase from $335m to $340m, including $10m from Prime.

This is up from its previous predictions of between $315m and $325m.

“The recent acquisition of Prime Media Group, coupled with the winning performance of the Seven broadcast television business and the strong growth of 7plus, make SWM the undisputed leader in the national total television market – a position that we plan to build on in the future,” Mr Warburton said.

“When you pull it all together, it becomes a very powerful platform.”

Mr Warburton said Seven’s performance in recent months had cemented the network’s position as the fastest-growing broadcast media company in Australia.

“The market in Q3 in BVOD grew 41 per cent, we grew 52 per cent. The market in TV grew 7 per cent in Q3, we grew 12 per cent,” Mr Warburton said. It was particularly pleasing that for the first time since the inception of BVOD, 7plus recorded more registered users (12.5 million) than its main commercial rival, Nine (12.2 million), Mr Warburton said.

He declared that Seven was in a strong position to renew its broadcast partnership with the AFL, which is the most lucrative sports rights deal in Australia.

Seven and Foxtel (majority owned by News Corp, publisher of The Australian) currently share the broadcast rights in a deal set to expire at the end of 2024, but in recent weeks Ten and its streaming arm Paramount+ have flagged that they are considering an audacious did for the next contract, which will be awarded by year’s end.

Seven has owned free-to-air rights for AFL matches since 2010.

After Wednesday’s conference, Mr Warburton told The Australian: “We have a great relationship with the AFL. We’ve been talking to them for a while.

“We’ve been growing the AFL’s market, particularly in Brisbane and Sydney, and we’re participating in the negotiating process.”

But in a thinly veiled reference to perceived efforts to try and inflate the cost of the next AFL rights deal, Mr Warburton said: “We’ll be sensible. It’s economics, not ego.”

He also suggested that Seven would approach the looming battle for the broadcast rights to the Australian Open tennis – currently held by Nine – with caution.

“We’ll definitely have a look at that. But Ash Barty’s retirement took a lot of the oxygen out of those rights.”

Mr Warburton said he was confident that Seven would again win the television ratings crown this year, following last year’s victory over Nine, citing the ongoing success of its “tentpole” shows.

“The Voice has won every single night it’s aired since we nicked it off Nine (at the end of 2020),” he said. “Our investment in content is working.”

Amid continuing speculation, Mr Warburton said the Kerry Stokes-owned company remained open to the possibility of partnering with an international streaming service, but the recent slump of sector giant Netflix had justified Seven’s decision not to rush the process.

“We’ll look for the right opportunity, not just any opportunity.”

Seven shares closed down 13c (0.66 per cent) on Wednesday to $19.60.