They will be grinding the teeth and sharpening the boning knife at Willoughby and Park Street because the Seven network is now by far the most profitable TV business in the country.
Seven confirmed its position as the leading profit earner with TV group earnings before interest tax and depreciation amounted of $256 million, up 45% over 2005, compared to the $215 million earned by Nine.
EBITDA for the Seven group rose 35% to $269 million and includes the contribution from Pacific Magazines (which earned EBITDA of $35 million, compared to the $261 million for the ACP Magazines business of PBL).
Seven has more stations, owning its outlets in all five major markets, Sydney, Melbourne, Brisbane, Adelaide and Perth, as well as owning its regional network in Queensland.
Seven’s TV earnings before interest and tax (EBIT) amounted to $222 million, up from $143 million in 2005.
That compared to Nine’s figure, given last week in the PBL accounts of $176 million. On an EBITDA basis Nine’s profits fell $55 million in 2005.
Seven’s revenues from TV rose $72 million to $983 million; Nine’s fell $35 million to $866.6 million.
Seven’s figure includes undisclosed affiliate fees from the Prime TV Network, which broadcasts outside of Queensland, but the Nine Network includes affiliate fees (based on revenue share) from the operators of the Nine stations in Adelaide and Perth, plus WIN and NBN, its major regional affiliates.
The Prime share of the Seven figure could be between $25 and $30 million, but the Nine profit contains an estimated $95 million to $125 million in affiliate fees, which are taken directly into the profit and loss account by both networks.
As a comparison, Foxtel earned $176 million in its second half to June on an EBITDA basis. Ten’s earnings fell at the half year (it balances in November).