Seven West Media, the owners of the Seven Network, has advanced the announcement of its 2015-16 results to next Tuesday, August 2 — more than three weeks earlier than last year, as well as in 2014 when the announcement came on August 25 and 27 respectively. The earlier-than-normal announcement is to allow the company’s senior executives to jet off to Brazil to make the opening ceremony on Friday night/Saturday morning. The top dogs at the network could be out of the country if the ACCC doesn’t release its decision on the takeover of News Corp’s Perth-based Sunday Times and website until after Tuesday. At the same time the axe is expected to fall on around 30 people at The West Australian later today as the $10 million in cost cuts ordered by the board, finally hit home.
Seven, though, will have something to talk about at Tuesday’s briefing, judging by its performance in the January-June period ad revenues. The combined ad revenues for the three network were terrible. They hit their lowest level for the first half of the year since the depths of the GFC in 2009. Total ad revenue for the sector in the six months to June was $1.74 billion, down 4.3% from the same period in 2015 and the lowest since 2009 when the economy was emerging from the GFC. Metro market revenues fell 3.89% to $1.35 billion, also the lowest since the first half of 2009 when the figure was $1.17 billion. While regional revenues fell 5.7% to $389 million, which was the lowest since 2009. The three networks took in $3.7 billion last financial year, down from $3.8 billion in 2014-15, and nearly $300 million under the peak in 2010-11 of $3.99 billion.
Of that revenue, Seven’s share remained above 39% (39.2% against 39.5% in the same period of 2015 and 41.3% in the six months to June 2014). Ten’s share of 25.2% was up sharply from 21.9% in the first half of last year and 20.1% in the same period of 2013. Nine’s share of 35.6% was down from 38.6% a year ago and the same share in the first half of 2014. It was Nine’s lowest share in four years — since the 34.4% in the first half of 2012. No wonder Nine wound back its profit guidance earlier in the year.
And even though inflation has been weak for most of the past eight years, it still would have carved a hole in the gross figures, worsening the slide. In fact since the June quarter of 2012, inflation is up around 8%, according to Australian Bureau of Statistics figures. That’s impacted budgets, costs (even though the networks have all attacked costs month after month) and revenue growth; it has been going backwards now for years. Another round of job cuts seems to be brewing if the size of the falls in the June half-year is repeated in the current six months, which is when revenues rise, boosted by the Christmas period at the end of the year.