Finance Finance News Costello is Nine’s new chairman

Costello is Nine’s new chairman

Peter Costello future fund
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Former Treasurer Peter Costello will lead Nine Entertainment through what the group hopes will be sweeping changes to media regulation in Australia.

Nine, which on Thursday unveiled a 6.1 per cent drop in underlying first half profit, said the former Howard government minister will replace David Haslingden as chairman on March 1.

“This is an exciting time of change in the media sector and NEC is now strongly positioned to take advantage of these developments,” Mr Costello said in a statement.

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Mr Haslingden, who oversaw Nine’s stock market float in 2013, has resigned, leaving Australia’s longest serving treasurer to lead Nine through what could be a very different media landscape.

The free-to-air networks have long called for the government to overhaul outdated rules and regulations that have come to handicap them in the fight against pay-TV and newcomers such as Netflix.

They have urged Malcolm Turnbull’s government to slash licence fees and scrap the so-called two-out-of-three ownership rule that covers terrestrial TV, radio and printed newspapers.

“Government imposed free-to-air licence fees that historically compensated for an unrivalled access into consumers’ homes are punishing our industry in an era when pretty much anyone can deliver content over the top,” chief executive Hugh Marks said.

“We are effectively paying four layers of tax – corporate, licence fees, as well as regulatory requirements around children and local content – while our new media peers in many cases pay none at all.”

Nine, Ten and Seven reported combined full year losses of nearly $3 billion in 2015, largely due to massive writedowns on assets including licences.

“The playing field must be levelled if we are to continue to maximise our investment in local content and local jobs,” Mr Marks said.

Nine’s underlying net profit for the six months to December was $78.4 million on revenues that declined 6.0 per cent on the prior corresponding period.

That excluded the impact of the Nine Live events business, the sale of which to private equity was completed in July.

Statutory net profit including proceeds from the sale was $320.8 million, three-and-a-half times more than $91.0 million a year earlier.

With two thirds of a $150 million buyback completed, the company announced another $150 million buyback.

Nine shares gained 7.5 cents, or 5.17 per cent, to $1.525.

Nine said it expects the metropolitan free-to-air market to be flat or marginally down over the full year, with its market share dropping to about 38 per cent.

Mr Marks called the performance a solid result in a challenging advertising market, flagging a five per cent drop in costs across the group despite broadcasting the Rugby World Cup and Ashes.

He said Nine could work with rival networks to help consolidate costs, while expenses would fall as Nine switched attention from costly overseas programming to local content.


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