ASIC has confirmed that it forced Nine Entertainment to impair the value of its TV businesses in last week’s interim financial statements, making that company the second of the country’s three major commercial networks to be monstered by the corporate regulator over asset values. Nine cut the value of the goodwill in its TV business by $260 million 12 days after rival Seven West Media revealed it had cut the value of its Yahoo7 joint venture by more than $75 million and changed the way it values the business.
ASIC issued a statement yesterday saying:
“ASIC notes the decision by Nine Entertainment Co. Holdings Limited (Nine) to write down goodwill relating to the Nine Network by $260 million in its financial report for the half-year ended 31 December 2016. ASIC reviewed Nine’s 30 June 2016 financial report as part of its ongoing financial surveillance program. ASIC raised concerns regarding the value of the goodwill relating to the Nine Network.”
Last week ASIC issued a similar statement regarding Seven West Media’s accounts:
“ASIC notes the decision by Seven West Media Limited (Seven West) on 15 February 2017 to write down its investment in Yahoo7 by $75.5 million in its financial report for the half-year ended 24 December 2016ASIC reviewed Seven West’s financial report for the year ended 25 June 2016, as part of its ongoing financial surveillance program. That review led ASIC to raise concerns regarding the carrying amount of the Yahoo7 investment.”
Presumably Seven West directors will tear themselves away from the Amber Harrison debacle and start an impairment review of the value of its TV business for June 30 decision. There is a more than $300 million discrepancy between market value and book value (over $1.3 billion).
Ten is already telling the market it has a possible impairment review underway after changing its profit guidance to a loss for the six months to today and August 31 (full year).
Ten shares rose on Monday, as did Nine shares. Seven West shares were steady on the low of 69 cents. — Glenn Dyer