Nine takes profit hit on soft TV ad market

Nine’s key executives including chief executive Mike Sneesby have taken hefty cuts to their bonuses as the company’s profit slumped faster than it could reduce costs.

Nine Entertainment has revealed a sharp fall in its annual net profit amid a lacklustre TV advertising market, with chief executive Mike Sneesby taking a hit to his bonus.

The media company’s annual net profit after tax slumped 22 per cent to $216.4m while its revenues slipped 3 per cent to $2.62bn.

The under pressure media company suffered a 12 per cent fall to group earnings to $517.4m while revenue in the company’s broadcasting arm – which includes free-to-air station Channel 9 – fell 10 per cent to $1.13bn.

Despite the revenue falls Mr Sneesby said he expects “the free-to-air market to moderate and improve into the second half and we also expect to see continued growth and strength in our BVOD (broadcasting video on demand) revenue.”

Nine’s publishing arm – which includes mastheads The Sydney Morning Herald, The Age and The Australian Financial Review – saw revenue drop 3 per cent to $558.6m.

Nine’s key executives did not receive their full bonus entitlements in the past financial year, the latest annual financial results show after failing to meet set targets.

Mr Sneesby forfeited 77.5 per cent of his target short-term incentive for the year, but took home total remuneration of $2.1m, including a base salary of $1.5m.

That was down from $2.69m in the prior year.

Meanwhile the company’s chief finance and strategy officer Mike Stanton received 50 per cent of his bonus. Mr Stanton’s total remuneration for the 2024 financial year – his first in the current role – was $1.07m.

Chief sales officer Michael Stephenson received 36.5 per cent of his bonus entitlements and his total remuneration was $1.24m, down from $1.8m.

Nine said in a challenging economic environment the Group EBITDA target of $553m was not met, instead reaching $513m. Mr Sneesby said the company had been subject to “significant regulatory review over the past 12 months including prominence, anti-siphoning and gambling advertising.”

“We’ve also seen the News Media Bargaining Code challenged as Meta (the parent company of Facebook and Instagram) demonstrates its intention to disregard the policy behind the code,” he said.

“The common theme across the majority of these regulatory matters relates to the increasing dominance of global tech companies, the rate of which these companies and broadening and deepening their influence is becoming an increasing threat across a wide range of industries including media.”

Nine Entertainment chief executive officer Mike Sneesby, chief finance and strategy officer Matt Stanton and chief sales officer Michael Stephenson delivering the company's annual results on Wednesday. Picture: Channel 9.

He said the federal government needed to “act quickly and decisively in the interest of all Australians.”

In June, Nine chief executive officer Mike Sneesby also announced that 200 jobs would be cut across the entire media organisation, including between 70 and 90 roles in its print division and 38 roles in broadcast, as the company sought to cut costs. Mr Sneesby told The Australian shortly after delivering the results on Wednesday that job cuts were part of “hard decisions” made by the company.

“As a chief executive or leader, there’s no doubt that when it comes to people and redundancies, it is one of the toughest things that you have to do,” he said. “But importantly, we have to make sure that we are set up for the future.”

In a note sent to Nine staff on Wednesday, Mr Sneesby explained that the company was “not immune to the economic challenges impacting businesses globally”, referring to the job losses.

“We’ve had to make some difficult decisions to responsibly manage our costs – decisions that were not made lightly and that I know have real impacts on our people,” he said in the email.

Mr Sneesby came under fire in June after it was revealed by The Australian he had flown to Greece for a week-long holiday just hours after slashing jobs across the business causing “white-hot anger” among staff.

He was spotted in the first-class lounge at Sydney Airport shortly before he flew to Europe.

Earlier this year, The Australian also uncovered widespread misconduct within Nine, including a wave of bullying and sexual harassment allegations.

Mr Sneesby subsequently announced an external independent review – specific to the company’s television news and current affairs department – and established a dedicated hotline for staff and former staff to report mistreatment. The review is ongoing.

Nine’s streaming business Stan recorded 2.3m subscribers and its group EBITDA rose from $37.1m to $46m. The Nine board is also set for a refresh following the abrupt exit two months ago of chairman Peter Costello, who resigned three days after he forcefully barged into journalist Liam Mendes from The Australian who was quizzing him at Canberra Airport.

Mr Costello was replaced by existing board member Catherine West and the company remains on the search for one, possibly more, directors to join the six-person board which is led by Ms West.

Nine shares closed 1c higher at $1.35 on Wednesday.

Originally published as Nine takes profit hit on soft TV ad market