Rumours of more cuts at Nine

9logo9The Daily Telegraph reports that private equity firm CVC, which owns PBL Media, has ordered more cost cutting at Channel Nine.

CEO David Gyngell is said to be “bracing” for more raids on Nine’s budget in the vicinity of about $20 million.

The newspaper notes senior staffers on $300,000-plus contracts were to be “first in the firing line” of PBL’s John Rowsthorne.

Maybe those big cash giveaways on homeMADE and Australia’s Perfect Couple didn’t help this month’s ledgers.

Source: news.com.au

14 Comments:

  1. @Jerome. Yes – I also think $500 million seems excessive given the recent poor quality of Warner Bros output.

    The main reason why 9 paid this amount was to block Channel 7, who according to The Australian were desperate for the rights.

    Also – 9 knew their strategy for Go! depended heavily on youth focused content.

    As David Gyngell notes in the article linked below: “And while it’s not ideal from a shareholder’s point of view, from an opportunity point of view we feel the best place to target advertisers is the younger demographic, so we will be launching a younger-focused entertainment channel.”

  2. yes selma i know, but the deal that 9 currently has, until the end of 2009, with WB also gives content for:
    “main channel as well as Go! The deal also includes all online and mobile rights to Warner conent”

    and they are only paying $42mil. i’m yet to hear what made it worthy of a 100%+ rise in price. especially when the GFC will likely mean that there will be less money spent on output. the only reason i can think of is that another network (likely 7) drove the price up in a bidding war. i would not have accepted anything more than $50mil.

  3. Oh and its bad PR. Much of what Nine have as aproblem is image and people wont even switch over to see if they have something good. Its just bad PR move to do more cost cutting.

    Nine, I got ideas!

  4. Do these twenty million of cuts get to Ninemsn?

    Apparently, Ninemsn has been yanking vids off Youtube, including some taped legit from the channel.

    Can you follow this up? Just look for aussiebeachut1.

  5. @Jerome – the Warner deal is giving 9 content for its main channel as well as Go! The deal also includes all online and mobile rights to Warner conent. 9 can also sell some content to Foxtel and Ten, which they have done in the past.

    So the costs are in effect spread across 9, Go!, ninemsn, Foxtel and 10.

    However, for the deal to be worth it, the quality of Warners shows will have to improve over its recent dull efforts.

  6. David @ Green Point

    Wasn’t it Kerry who said “you only come across one Alan Bond in a lifetime”? Is history about to repeat itself? But who is that person waiting in the wings looking a lot like Bruce Gordon…?

  7. apparently to some Nine have mountains of cash to spend on NRL, AFL etc. Reality is CVC is clearing out overpaid areas then clearing out them selves when the ASX listing comes about in 2010

  8. CH9 has got to be smarter with their programming, why not promote new shows instead of airing shows with little promotion, than wonder why no one tunes in… duh?

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