Inside Ten's company accounts; SCA's unenviable new milestone
Inside Ten's company accounts; SCA's unenviable new milestone
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Ten’s financial situation is more solid than you’d think
Media companies that are not locally listed enjoy a luxury unavailable to their ASX-beholden peers: they get to avoid the near-realtime scrutiny of results season every six months.
But they still have to talk to the tax office, and eventually, if they’re big enough, the annual reports end up on ASIC. It happens more slowly, but it does happen.
Ten filed its annual report for the calendar year of 2021 nearly two months ago. The 56 pages are sitting on the ASIC website for anyone willing to outlay $44 for the download.
The headline is that despite being a distant third behind Seven and Nine in the ratings, despite the lack of a top tier sport, and despite the disruptions of Covid, Ten Network Holdings reported an underlying profit of more than $100m in 2021.
There’s more than one way of measuring profit. The version generally accepted as the best measure of company health is EBITDA - earnings before interest, taxation, depreciation and amortisation. For 2021, Ten reported an EBITDA profit of $103.8m, up from $11.3m the year before.
And its headline profit was bigger yet - after revaluing the company’s TV broadcasting licences to $130m after previously writing them down to zero, its profit before tax rose to $288m.
That was on revenues of $695m, up from $582m in 2020.
While Paramount Global (or ViacomCBS as the company was branded at the time) is the ultimate owner, Ten didn’t pay a dividend so the profit effectively remained within the company locally.
The annual report was the first with chief operating and commercial officer Jarrod Villani at the helm - he become a director on February 5, 2021, joining chief content officer Beverley McGarvey and international president Maria Kyriacou on the three-person board of directors.
Paramount, however, saw benefits beyond a dividend. Ten pays its parent company for its content. In total, Ten Network Holdings spent $565 on its TV content in 2021. Within the accounts it revealed $51m of television costs payable to related parties, which presumably covers output deal(s) with Paramount Global.
Unlike the ASX rules, pay to company bosses is not broken down at individual level. However, the report revealed that total compensation fell slightly from $7.1m to $7m.
There were no obvious clues in the report about the early performance of streaming service Paramount Plus (which launched in March 2021) - television and digital revenue were not separated within the report.
With Ten lagging in the ratings, the vibe within the industry was that it was hard to see where it would go next, particularly after missing out on AFL and cricket at the end of 2022.
Even with the caveat that these numbers are more than a year old, the cold hard data suggest that third place isn’t a bad place to be if costs are under control, which they are at Paramount ANZ.
Although not directly comparable because Seven and Nine report to the traditional financial year rather than the calendar year, Ten’s $100m EBITDA for January to December 2021, was well behind Seven West Media’s FY22 EBITDA of $342m and Nine’s $370m. But it also has the benefit that unlike its peers (and its parent company), Paramount ANZ has no local debt.
Ultimately the fate of Ten will be far more tied up in the machinations of its parent company Paramount in a rapidly changing US streaming landscape than its local performance.
Indeed, all the TV players are far more exposed to the movement of the chess pieces in the US than they would like to admit. That deserves deeper analysis in another piece, which will come soon.
But the numbers underline that for Paramount, Ten is an asset rather than an encumbrance..
Unmade Index flat as SCA hits another low
Seja Al Zaidi writes:
The Unmade Index came to a midweek standstill on Wednesday with a slight dip to 0.07% to finish the day at 685.4.
The most significant milestone of the week came on Monday when light pre-Anzac Day trading saw the share price of Southern Cross Austereo hit a new low of 80c. That saw the company’s market capitalisation sitting below $200m at the close of trading for the first time.
Yesterday SCA recovered slightly, up by 1.23%
Nine was another loser yesterday, dropping by 0.97%.
On the upside, HT&E rose by another 3.64% yesterday, taking its gains over the last five days to more than 10%.
The next biggest rise came from agency holding company Enero which rose by 2.69%.
Time to leave you to your Thursday. We’ll be back with more in Best of the Week on Saturday.
Have a great day.
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media