Seven West Media reports $744m loss
CEO Tim Worner sees bonus cut to zero and warns that broadcast rights for sporting codes are "not sustainable."
- Published by David Knox
- on
- Filed under News
Seven West Media has posted a full-year loss of $744m with CEO Tim Worner’s short-term bonus cut to zero, taking his 2017 total pay down to $2.74 million from $3.19 million in 2016.
Other Seven executives also took hefty bonus cuts.
The $744.3 million loss follows a profit in the previous year of $184.2 million, and was due to close to a billion dollars in write-downs.
In a statement, Seven statement cited “revised market growth assumptions” that are impacting the carrying value of its television, newspaper and magazine businesses.
CEO Tim Worner said: “Our results reflect a tough market, one that continues to change at pace, but a pace that we must match in our transformation.”
“Despite these tougher conditions, we continue to lead in the core markets in which we compete, while at the same time making the necessary and sometimes difficult decisions in the transformation of our business. On the financials, our underlying EBIT was within guidance provided at the announcement of our financial results for FY16. Operating costs continue to be a focus with operating costs down $20 million (excluding Olympic Games, license fees and 3rd party commissions).
“This year we marked our 22nd consecutive half of ratings and revenue leadership in metro broadcast television. We also expanded our leadership in content creation and distribution across new delivery platforms with over 45 per cent share in live streaming and AVOD catch-up revenue. We have continued to invest in creating our own content and we are growing our productions business globally, delivering a further 11 per cent revenue growth in the year.”
But Worner also warned that Sports rights have reached a tipping point in Australia.
“Given changes in the market, price rises are not sustainable. We have to reach a position where the economics stack up for all parties [and] where the power and reach that free-to-air brings [to sports],” he said.
“These sports code have to start to recognise the power of what we bring to them.
Meanwhile Chairman Kerry Stokes referred to recent legal battles this year surrounding Worner and former executive assistant Amber Harrison, “Among the various issues faced during the year, we were obliged to take legal action to protect our business from the release of confidential company information and defend the reputations of our people. As detailed in two separate successful NSW Supreme Court judgements, our group acted professionally and appropriately in the handling of this matter, which we trust is now closed.”
10 Responses
I have huge sympathy for him. How will he survive on that $2,74 million salary?
The market is tough because of previous dumb decisions by all the networks. The sooner they move to a subscription streaming model the better for them. I can also see the connection of the reduced licence fees, and write downs. As for the sports rights the simple solution for seven is to go for streaming rights only, thats the growth area. We have ample evidence that that people will pay for quality content, there is room to move on that front. Its all about content delivery and 7 are not very good at it.
Every time they get a reduction in licence fees, they have to write down the value of the licence on their balance sheet. It streaming services can make money buying up exclusive rights and charging fans for games, the price of sports rights will skyrocket not fall. The networks are just trying to talk down the prices they pay ahead of renegotiations. But player unions are going to great lengths to lock in fixed percentages of revenue so that players will benefit if this happens.
When asked what the cuts would be, Worner said there will be more blocks of The Big Bang Theory across all of Seven’s channels as the ratings show people can’t get enough of it.
Did he actually say that?
*Yeah I should have tagged it as sarcasm or joke I put those words in the reply with sql brackets and it didn’t show up.
No. JohnnyIP5 was creating fake News.
Either that or joking because of Seven defending showing so many TBBT repeats the other week.
If it’s tough for Seven, I have even more sympathy for a network like Ten. Hope I don’t provoke any heated response, the chart in this article paints a more accurate picture – revenue leadership is more important than ratings leadership.
The chart is interesting more for what it doesn’t show than what it does. If ad $ are shrinking, winning on % ad revenue market share just means you’re first among losers…