BotW: Relevance drift; Stan's late winner; Vinyl Group gets a new credit line
Welcome to Best of the Week, written in central London while you were asleep.
Today: Why the EPL deal was better for Nine than Optus; how Vinyl Group has only been renting a key domain; and what marketers in the northern hemisphere are talking about.
Happy National Workaholics Day. Of course that would fall on the weekend.
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Heat is on for agencies
I was in London this week for MAD//Fest. The slightly forced acronym stands for marketing, advertising and disruption.
If there’s a difference in being at a British marketing festival on a sunny day compared to the rest of the world, it’s the number of pale legs suddenly on display.
As we sweltered on a 30C+ day, the Brits didn’t have much of a base tan to fall back on. With the exception of the walnut-shaded Sir Martin Sorrell, this was not the Cannes Lions crowd.
And it really wasn’t. What was striking about an audience predominantly consisting of marketers was how little agencies came to the fore of the conversation. As Don Draper said: “I don’t think about you at all.”
The only time the agencies were part of the conversation was when they had paid to be on the stage. And what was striking then, or at least for the sessions I saw, was how little of substance they had to say about what they were up to.
Instead the conversations were about the impact of the platforms, the impact of AI (of course) and the still-rising tide of the creator economy.
On Brick Lane Beach, the tide was going out for adland.
Stan puts one into the top corner
The week began and the financial year ended with the news that Nine had closed a deal with Optus to take over its key soccer rights - the English Premier League and sister knockout tournament the FA Cup - and put them on Stan Sport
Absent from the ASX press release was detail on what Nine will have to pay for the rights over the next three years. It revealed that Nine would give Optus $20m in what largely looks symbolic, given that Optus will then “make periodic contributions to Nine through to 2028”. In other words, Optus will end up paying Nine to take its expensive soccer rights off its hands for the three years remaining of the deal.
The arrangement will also see Nine inherit the Optus subscriber list and Optus Sport social media logins.
According to the announcement, the acquisition will “be both EBITDA (estimated in the low single digit $ms) and cash positive to Stan”.
It’s a good deal for Nine, which benefits from the new management of Optus taking the company back to its roots as a telco after overpaying for the rights. Presumably, the Optus SubHub will be wound back too.
Half of those Optus subscribers are not current Stan subscribers, which gives Nine another chance to grow its numbers which have plateaued. It also helps justify another price increase for subscribers.
With Wimbledon currently on Stan, it makes it the platform for sport-loving night owls.
And although the deal adds to Stan’s credibility as a sports destination, it’s not the main game.
For soccer that will come when the next round of renewal negotiations begin. DAZN, the new owner of Foxtel Group, may well make a global play.
The next set of NRL rights, currently spread between Nine and Foxtel will be the crucial fight.
Vinyl finishes the week on a high after a week of visions and related party transactions
Vinyl Group, owner of entertainment publications and music platforms, outperformed the rest of the Unmade Index on Friday with a rise in share price of 9.1%.
During the week Vinyl Group revealed that it will be issuing new stock to one of its largest shareholders, the Paul Wiltshire-led Songtradr.
Vinyl Group told the ASX that the domain Vinyl.com, which it uses for its online record store, is actually still owned by Songtradr, with an agreement to sell it for $1m plus a 5% cut of any future sales made on the platform.
Rather than paying cash for the domain, Vinyl Group plans to issue new shares to Songtradr which will also waive $344,000 additionally owed by the group.
Songtradr will also provide Vinyl Group with a $1.5m credit facility for the next two years.
When Vinyl Group last updated the market on its top 20 shareholders back in February, Songtradr owned 17.6% of the company while Wiltshire Media held a further 2%. Vinyl said the deal will see Songtradr get at least another 5% of the company.
This week Vinyl Group also issued an update to the market which it labelled as price sensitive, saying that it has a “vision” to become profitable during the coming financial year and is planning to become “an AI-powered media business”. It did not elaborate on what that meant.
Meanwhile Seven West Media also had a good day, rising by 3.5%. ARN Media was up by 1.1% and Southern Cross Austereo improved by 0.9%.
The only Unmade Index stocks to fall were Nine (down 0.3%) and Ooh Media (down 0.28%).
The Unmade Index closed the week on 570.6 points, up by 0.36% on Thursday.
More from Mumbrella…
Time to leave you to your Saturday. I’m about to see mine vanish somewhere into the fog of time zones and travel as I hop on QF10 back to Australia. I always feel vaguely cheated to get on board a plane on Saturday lunchtime only for it to be Sunday night by the time I make it to Sydney.
If you’d like a little more from me in the meantime, I managed to invite myself onto one of my favourite British podcasts, Media Club, with Matt Deegan. We discussed the challenges for public broadcasters covering the Middle East conflict - a problem the ABC and BBC have in common - plus MAD//fest highlights and live sports rights. You can find The Media Club in all the usual podcast places.
And I also joined WPP Media’s James Welch for his After Dinner Chats podcast to talk on his Ripped Off Less series about ad fraud, the Droga legacy, and the tricky topic of principal media.
We’ll be back with more on Monday.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher - Unmade + Mumbrella
tim@unmade.media
