Seven West Media chief James Warburton expects TV revenue to drop by 8 per cent

Seven chief executive James Warburton concedes the company’s revenue is likely to decrease because it doesn’t have the benefit of an Olympic Games in the 2023 financial year.

Seven West Media chief executive James Warburton delivering the company's 2022 financial year results. Source: Seven West Media

Seven West Media expects television revenue to decline by 8 per cent in the six months to December 31, largely because of a lack of an Olympic Games broadcast.

Those revenues will still be 2 per cent lower, adjusted to remove the effect of the Tokyo Olympics which were held in that period last year.

Seven West chief executive James Warburton said while “more people watch Seven than any other network,” there would be challenges in the months ahead.

“For the first half, Seven’s total TV revenue is expected to decline 8 per cent, or 2 per cent adjusting for the Olympics,” he said at the company’s annual meeting on Thursday.

Mr Warburton said that in the 2022 financial year Seven had a 39.1 per cent revenue share, including the Tokyo Olympics, and the company was targeting 39 per cent in the 2023 financial year.

Seven is targeting a 40 per cent-plus revenue share in FY24.

The Kerry Stokes-controlled company last month announced a multi-year deal with US studio giant NBCUniversal and on January 15 will launch a new channel, 7Bravo on free-to-air TV and on its streaming platform, 7plus.

“Including the recently announced NBCUniversal deal and related costs, FY23 costs are expected to be between $1.225bn and $1.25bn,” Mr Warburton said.

“Incremental revenue should offset related new deal costs.”

In the three months to September 30, Seven secured a national total TV share of 40.2 per cent in a market down 6 per cent.

Mr Warburton noted a big win for the media company was the recent signing of AFL media rights from 2025 to 2031 which would cover broadcast and, for the first time, digital rights. The AFL signed the seven-year, $4.5bn deal with Seven and Foxtel in what was the richest TV rights contract in Australian sporting history.

Mr Warburton noted growth to digital earnings – from $6m in FY18 to $139m in FY22, or 40 per cent of group earnings.

The company has announced an on-market buyback of 10 per cent of the company’s shares.

Mr Stokes said in an address that the company was “well placed” for the financial year.

“Seven was not only Australia’s most watched TV network in the 2022 financial year but also posted the greatest share of revenue – combining to deliver the group’s best result for the last 11 years,” he said.

“Meanwhile 7plus now has more than 13 million registered users and is well positioned to grow rapidly thanks to new content deals, including the AFL and the recently announced NBCUniversal agreements.

“Our transition to be a comprehensive multi-platform media business is delivering tangible results, with digital expected to generate almost half of our earnings over the next couple of years.”

Mr Stokes said the company had experienced strong results across the board and said free-to-air offerings had significantly expanded with the acquisition of the Prime Network.

UBS analyst Tom Beadle said the first-half revenue guidance was in line with his expectations.

Seven West shares ended the day 2.2 per cent lower at 45c.