Seven: As bad as it gets?
Welcome to a Thursday update. Today: What we leaned from Seven’s end of financial year results.
If you’ve been thinking about upgrading to an Unmade membership, this is the perfect time. Your membership includes:
Member-only pricing for our HumAIn and REmade (October 1) conferences;
A complimentary invitation to Unmade’s Compass event (November);
Member-only content and our paywalled archives;
Your own copy of Media Unmade.
Swimming in the rain: Seven’s new boss finally speaks
New Seven West Media boss Jeff Howard finally said something publicly yesterday, fronting the company’s annual results announcement.
I say fronting. Unlike his predecessor James Warburton, Howard opted for a webinar format. Gone was the live-from-a-newsdesk approach preferred by Warburton. Listeners had to imagine the expression on Howard’s face. I’m guessing it was a frown.
Seven’s share price was flat yesterday which suggested there were no surprises for the market. The bad news had already been priced in. The best to hope for is that the company has now cut its costs to a point where they match the sector’s revenue declines.
Revenues were down a bit (by 4.9%). Profits were down a lot (by 33.2%). Net debt ($301m) is now bigger than those annual EBITA profits (and bigger than the company’s market capitalisation of $239m too).
The TV market has improved somewhat into this new financial year, but Nine’s Olympic coverage sucked up the extra dollars, and then some.
There wasn’t was any kind of deal hint to juice the SWM share price. Indeed, the share price may slip some more now the company has decided to stop its stock buyback program, which usually helps prop up a price.
Gone was the promise of deal making in the offing that was a constant drumbeat to the five years that James “we’ll be a hunter” Warburton was at the helm.
The prospects of SWM being a launch partner (or acquisition target) for the NBCUniversal-owned Peacock subscription video on demand platform have cooled.
Responding to an analyst question, Howard said: “There been a lot of speculation on SVOD in the past. I don’t think we’re more desperate or less desperate to get into the space. It’s not something we’re currently chasing actively.”
By the way, Howard pronounces SWM as “swim”. We’ll see if that catches on.
He flagged course adjustments.
There will be “a change in the go-to-market strategy coming to the market in the next month or two”. That currently sees BVOD (broadcast video in demand) advertising inventory currently sold to advertisers by SWM in a different way to broadcast eyeballs.
“We are looking at monetising BVOD. We drove our BVOD minutes by 39%, but the BVOD revenue was up 10,” he observed.
But the wider all-in rebrand for the Seven Network that CMO Melissa Hopkins was working on before being made redundant appears to have been dropped.
Perhaps the least credible claim came when an analyst made the excellent point that the TV networks should go back to working together: “Is there anything the industry can do to work better together? It feels like something needs to be done together.”
Howard replied: “I agree. We’ve a track record of having done some stuff in the past and I’m keen for that to be expanded as we go into FY25 and beyond.”
I say least believable because Seven was the one that did most to kill the collegiate approach briefly corralled by the launch of the now sparsely resourced ThinkTV back in 2016, through launching hot and cold wars on its rivals.
SWM proprietor Kerry Stokes bankrolled war criminal Ben Roberts-Smith’s failed defamation case against Nine, and the company paid the rent of rapist Bruce Lehrmann during his failed defamation action against Ten.
And under Warburton it went back to the old TV ways of briefing to the media against rivals. There will be little trust from the other networks while the people who were most involved in briefing against them are still in place.
Meanwhile there were some other nuggets in the SWM annual report, which was also released yesterday.
Warburton’s final year netted him remuneration of $1.3m. He’s now SWM’s eighth biggest shareholder with a 1.5% stake in the company.
Howard, who was previously chief financial officer, got $977,000 in FY24. Former sales boss Kurt Burnette, made redundant in June, took home final remuneration of $1.4m. Both Burnette and Howard were given special bonuses of $150,000 each for signing the Bravo deal with Comcasts’s NBC Universal.
The scale of SWM’s reduced short term ambitions could be best illustrated by Howard’s response to an analyst question: “Is it possible to achieve a low single digit revenue decline? Yeah.”
The magic of television.
We called it on Seven’s prospects a year ago:
Our view in Seven’s war-on-its-rivals mentality:
Our take on SWM’s NBCU connection:
How Seven attacked its rivals:
Unmade Index finishes flat
It was a flat day on the Unmade Index on Wednesday, with our basket of locally listed media and marketing companies trending up slightly by 0.27%
Of the larger stocks, Ooh Media did best, up by 1.75%. Southern Cross Austereo lost 1.6% while Nine dropped 1.1%.
Time to leave you to your Thursday. We’ll be back tomorrow with an audio-led edition in which I talk to Foxtel Group’s streaming and advertising boss Julian Ogrin in an interview recorded after the company shared its latest sign up numbers and owner News Corp put it on the block.
Have a great day.
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media