20 February, 2020

Seven Merger Talks Gather Steam

By B&T Magazine

Following Monday’s dire half-yearly results and yesterday’s news of a new low in the share price, talk of a Seven merger appear back on the cards.

Ever since CEO Tim Worner was abruptly sacked back in August and replaced by “Mr Fix It” James Warburton, industry talk of a possible sale or merger has plagued the beleaguered network.

Having said that, Warburton has repeatedly and strenuously denied the claims.

There had been talk that Seven West Media’s billionaire owner Kerry Stokes wanted out of the media game to concentrate on his infinitely more profitable mining caper.

There’s long been rumblings that News Corp and Seven could enter into some form of dalliance, although that probably was spun-off after Nine bought Fairfax.

Speaking to The Australian today, Seven chief executive Ryan Stokes (main photo) said consolidation was Seven’s best route out of its woes and he’d agreed he would fund the expansion if the opportunity arose.

“I think consolidation is a logical step for the industry and I think that’s going to enable a better leverage of assets through the audience we have and others.

“We don’t see the business currently requiring funds but should a situation occur with a good opportunity we’d definitely consider it.

“That’s where we see a logical opportunity. It’s a situation we’ve seen for a while but it’s a matter of how that’s executed. But we certainly see potential for something to occur,” he added.

However, Stokes again denied that Seven was for sale.

When asked by The SMH if the network was on the market, Stokes said in a roundabout way: “We see opportunity with media … I certainly believe in the value of how you can optimise a large-audience business that free-to-air is.”

The network is currently saddled with $655 million of debt. It’s presently trying to offload Pac Mags to rival Bauer but is being hampered by the ACCC who deems the sale as non-competitive. Seven also failed in its attempts to snare regional broadcaster Prime Media in December.

On the ratings front, its 2020 season of MKR has been repeatedly smashed by rival MAFS and 10’s Survivor. Arguably its one shining light has been Sunrise that has successfully seen-off Karl Stefanovic’s Today return.

But there are green shoots on the horizon. The AFL returns next month while the network has the Tokyo Olympics in July.

“We’ve taken cost out, we’ve completely reset the content,” Warburton told The SMH yesterday. “A lot of the new content doesn’t launch until late April and so share is under pressure in that early part of the year. If things fire, that could help us in the back half of the year.

“It’s that balancing act of transforming, investing in content and at the same time … primary revenue source is declining … so that’s really been the focus and led to the revised guidance,” he said.

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James Warburton Seven