Nine’s revenues in FY24 was down by 3 per cent and its EBITDA fell by 12 per cent due to declines in the linear TV advertising market. Its publishing business and Stan are in better health, and Nine’s leadership believes that its market value doesn’t reflect the business fairly, a point that can be made when Domain accounts for 60 per cent of the total business valuation.
Nine has had a challenging 2023/24 financial year due to a difficult TV advertising market. Overall revenue and earnings fell, largely due to declines in linear TV advertising, with its growth in subscriptions and BVOD revenue unable to offset advertisers pulling money out of TV.
In the year to 30 June 2024, Nine reported group EBITDA of $517 million, down 12 per cent on FY23, and revenue across the group declined by 3 per cent to $2.6 billion.
Nine’s Paris Olympic and Paralympics coverage, which will flow into its FY25 figures, should give it a $160m revenue shot in the arm, but interim CEO Matt Stanton warned that the total TV outlook remains gloomy.
The declines in revenue fly in the face of the fact that Nine has grown its total TV metro Free To Air (FTA) audiences on an average in terms of total people and younger demos. Nine has also grown its 9Now audience by 46 per cent.
“Across the 2024 financial year, our total television live audiences for both free-to-air broadcast and streaming recorded growth,” interim CEO Matt Stanton said. “This was a positive reversal after years of audience fragmentation and a highlight of Nine’s performance for the year.
“And while traditional media revenues were down on the previous corresponding period, our audience results and revenue share results were strong, subscription and licensing revenues are now more than 30 per cent of total wholly owned revenue, with 5 per cent growth for the year, and growth at both Stan and publishing.”
Stan has grown to 2.3 million subscribers while its publishing business, in particular the Australian Financial Review, is also growing its subscriber base. More than 500,000 people now subscribe to the AFF, which has 1.7 million registered users.
“We are particularly pleased with the performance of Australia’s leading business publication, the AFR, with growth in revenue and profit driven by strong subscriber trends, it remains the most profitable masthead in our group, the value of which is not well understood by the market,” Stanton added.
Domain is another part of the business that is growing – albeit not at the same levels of rival REA Group. Its unique audience numbers are up 10 percent to 6.9 million and Nine has lifted its marketing support for Domain by 20 per cent in FY24.
Nine’s chair Catherine West told shareholders that there were no plans to sell Domain or buy a larger stake in the real estate listings business, in spite of industry rumours to the contrary.
Overall Nine had a 10 per cent rise in subscriptions and licensing revenue, which now accounts for 30 per cent of revenue across the business. Domain accounts for about 60 per cent of Nine’s market valuation despite only bringing in 16 per cent of earnings.
Stanton believes Nine’s share price of $1.08 is undervalued due to the structural challenges facing its linear TV business when its digital assets are growing rapidly.
“The point around is that 60 per cent of our market cap is for Domain, we believe the other 40 per cent is undervalued. For us, the strategy that we’ve outlined is around trying to accelerate growth in digital revenues outside of Domain,” he said.
Nine didn’t provide any details about its successor to former boss Mike Sneesby, but said the hunt is ongoing. Industry insiders tell B&T that Amanda Laing could be a front runner.
Nine did provide details on Sneesby and other key executives pay. In FY24, Sneesby earned $2.125 million, including a reduced bonus and incentives from his FY23 remuneration package of about $2.7 million.
The business cut costs by $50 million in FY24 and plans to strip out another $50 million in FY25, although it is not clear where cost savings will be made. Towards the end of FY24 Nine announced it planned to cut 200 staff, about 4 per cent of its workforce, which included cuts across its publishing business.
