Southern Cross Media plummets as Nine returns to WIN
Southern Cross Media shares fell as much as 20pc after Nine changed back to WIN for regional distribution of its content.
Shares in regional radio and television broadcaster Southern Cross Media Group fell as much as 20 per cent on Friday – the most in 12 months – after Nine Entertainment Co walked away from renewing a regional affiliate agreement, choosing to switch back to former long time broadcast partner WIN Corporation.
The move will mean that from the end of June Nine’s broadcast signal will no longer be carried across the Southern Cross network in regional Queensland, Southern NSW and regional Victoria, and instead will be carried over WIN in the same market.
It is also expected to lead to the loss of dozens of regional journalism jobs and the likely axing of Nine’s regional news bulletins that operate in the same regional as WIN.
In a memo to staff Nine’s chief executive Hugh Marks said both news and advertising jobs will be impacted as the broadcaster looked for “efficiencies” but did not specify the amount of roles hit.
“We are aware that there will be some roles impacted as a result of this change but those impacted can be assured that (Nine’s) director of News and Current Affairs Darren Wick and his team are actively looking at options for redeployment for as many employees as possible,” Mr Marks said.
Nine will also axe a advertising sales agreement which has seen Southern Cross sell ads for Nine’s Northern NSW television station.
Under the seven year deal WIN will enter into a 50-50 split with Nine of advertising revenue sold in regional markets.
The move caught Southern Cross Media off guard with its shares tumbling by as much as 20 per cent – the company’s biggest decline since Covid-19 rocked the markets last March – before it closed at $1.98, down 10.4 per cent.
Mr Marks said the company had decided to return to its former broadcast partner WIN that will see its content broadcast into Tasmania, regional Western Australia, Victoria, Queensland and Southern NSW.
“While our relationship with Southern Cross has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine’s premium content into more regional markets under one agreement, and to work cooperatively with them on a national and local news operation, mean this is the right time for us to return to WIN,” he said.
“The terms of this new affiliation agreement should be positive to Nine’s EBITDA from financial year 2022 through the broader reach of Nine’s channels and by enabling incremental efficiencies across both sales and news.”
WIN – a company privately owned by reclusive Bermuda based nonagenarian millionaire Bruce Gordon – will provide temporary sales representation for Nine in Northern NSW and Darwin.
WIN chief executive Andrew Lancaster said the company was pleased to be partnering with Nine again.
“We are pleased to be furthering our already strong relationship with Nine, through this affiliation agreement,” he said.
“Nine has clearly established itself as Australia’s leading media business and we are excited to be returning to carriage of the Nine broadcast content to our regional viewers.”
All change
Southern Cross Media Group released a statement saying it was one informed of Nine’s decision not to renew the deal on Friday morning, but it would soon commence discussions with Channel 10 to fill the programming gap in certain regional markets.
“For more than 20 years before entering the Nine affiliation in 2016, SCA was affiliated with Network Ten in SCA’s licence areas,” the company said.
“SCA looks forward to discussions in coming weeks with Network Ten to establish a new affiliation in regional Queensland, Southern NSW and regional Victoria from 1 July 2021 with marketing support from SCA’s extensive network of regional radio stations and continuing strong sales performance.”
The company also said its television business continues to broadcast Seven West Media Content to Tasmania, Darwin, Central and Spencer Gulf markets under a deal in force until June 30 next year.
The Seven West Media deal accounts for 20 per cent of television advertising revenue, Southern Cross Media Said.
In the first half of the financial year Southern Cross Media’s television division booked $84.9m in revenue.
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