Seven Reports 3% Drop in Earnings For FY23 Despite Ratings Dominance

Seven West Media - James Warburton with Kerry Stokes

Despite being Australia’s most watched free-to-air network, the Seven Network’s revenue was down 3 per cent during F23 for a total of $1,488 million.

Lead image: L-R James Warburton & Kerry Stokes

Seven West Media shares were trading near a 52-week low on the ASX, sitting at just 27c at the time of writing.

In a trading update at the media group’s annual general meeting, Seven said the September quarter was in line with the previous update given at full-year results in August. “Seven was slightly ahead of the market, which was down 8 per cent during the period,” said CEO and managing director James Warburton.

Seven chairman Kerry Stokes pointed out that digital is still going strong despite revenue being down. “Importantly, our digital earnings contributed over 49 per cent of our overall earnings in the 2022-23 year, with highlights of the year including a new agreement between Seven Network and NBCUniversal to bring NBCUniversal’s extraordinary content portfolio to all Australians, live and free,” Stokes said.

The deal saw Seven acquire and broadcast NBCU’s scripted network, cable dramas, and comedies on Seven and 7plus. New digital channel 7Bravo is also the recipient of unique content and is reported to have experienced a very strong take-up by viewers.

“Our free-to-air programs continue to attract strong audience numbers from dawn with Sunrise to late at night, with our general entertainment programs, including The Voice, Dancing With The Stars, SAS Australia, and Farmer Wants A Wife, backed up by news programs that are building their audiences,” said Stokes.

Warburton said that despite the decline, operating costs were well managed. “Excluding depreciation and amortisation, our costs increased by 0.9 per cent over the prior year to $1.2 billion,” he said. “EBITDA declined 18 per cent to $280 million, and underlying net profit was $146 million.”

Warburton quickly pointed out that while the numbers are less than favourable, the decline reflects the industry as a whole. “While the total television market declined by 4.5 per cent in the first half of FY23, the decline accelerated during the second half as consumers started to feel the pain of increasing interest rates. Against some tough comps, the total TV market declined nearly 12 per cent in the second half. Pleasingly, the BVOD market maintained its positive momentum”.

The decline in television revenue is not isolated to Australia. The United States has shown a free fall in television advertising revenue last year, with CBS’s parent company, Paramount Global and NBCUniversal leading losses. The Information’s Martin Peers reported: “What’s striking is that the TV folks are struggling even as Meta Platforms and Google reported decent ad growth. Notably, while the TV companies are trying to sell ads on their streaming services to capture some dollars moving to digital, the amount they’re generating doesn’t come close to offsetting what they’re losing.”

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