Finance Finance News Michael Pascoe: More job losses are a safe bet after Network Ten’s dark day
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Michael Pascoe: More job losses are a safe bet after Network Ten’s dark day

Big-name casualties grabbed the headlines, but Ten's cuts are part of a far wider problem. Photo: TND
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A well-known TV star among the casualties ensured Tuesday’s Network Ten cost-cutting won headlines, but Ten’s story is only a small part of the slashing and burning that typifies traditional media as income falls below costs.

By the end of this month, Nine Entertainment, Seven West Media, Southern Cross Media and Nova are likely to add to the mountain of media jobs lost through digital disruption compounded by COVID-19.

That will be on top of the hundreds of jobs shed by News Corp this year, without details being provided, and the decimation of Australia’s magazine industry.

For Channel 10, the newsroom reorganisation is “back to the future”, as Crikey media correspondent, Glenn Dyer, reminded ABC’s news radio.

When Canada’s CanWest had control last century, the smaller capitals’ evening news bulletins were broadcast out of Sydney and Melbourne. There is little new under the Ten cost-cutting sun.

The culprits are well known.

The ability of Google and Facebook to deliver cheaper and more targeted advertising has stolen revenue from the traditional scatter-gun broadcasters and newspapers.

Streaming services, led by Netflix but rapidly multiplying, have robbed eyeballs from free-to-air television.

The specialist online employment and car sales sites have mopped up newspapers’ classifieds revenue, the former “rivers of gold”.

Falling print circulations have undermined display advertising and now the pandemic has smashed the newspapers’ last reliable bastion of big ads – the travel pages. (What travel?)

Seven, Nine and Southern Cross all report their results by the end of the month. None of it will be pretty.

All were facing challenges before the ’rona recession took their revenue down another level.

With controlling shareholder Kerry Stokes apparently refusing to put any more money into Seven, the company has been conducting a rolling fire sale.

A year ago, Seven shares were worth 39 cents. Now they’re lucky to be  10 cents and have been as low as six.

Shares in Southern Cross, owner of radio and regional television networks, have gone from 85 cents to 16 in the same period.

Nine Entertainment shares have held up relatively well, down from $1.90 to $1.47 – but the omens are ominous for the company’s August 27 results.

A trading update by CEO Hugh Marks in May was telling for what details were not included.

Sure, digital subscription revenue for its newspapers was up in the first four months of the year by 13 per cent on the previous corresponding period, but as far as advertising revenue and print circulation went, there was only disclosure of vague “pressure”.

 

Nine’s free-to-air broadcasting revenue in April was down 30 per cent and “May looks likely to be down on April”. March quarter radio market was down 12 per cent.

There is some serendipity in Ten’s announcement occurring on the same day as radio network Nova Entertainment was reported to be facing the loss of 70 jobs.

Nova is owned by Lachlan Murdoch – Ten hit the skids when he was running it.

Ten has had a colourful history of costing investors money.

In 1986, Westfield billionaire Frank Lowy paid Rupert Murdoch’s News Corp $840 million for Ten’s east coast stations and proceeded to lose most of that over the next decade.

When CanWest took control, it cut costs and pitched Ten as the cheap and cheerful youth network – it was characterised by its never-ending supply of The Simpsons episodes.

The Canadians sold their half interest for $680 million in 2009.

A year later, James Packer and Lachlan Murdoch bought in, soon to be joined by Gina Rinehart and Bruce Gordon.

Collectively, the four billionaires paid $1 billion – and blew the lot, along with the investments by small shareholders.

The Murdochs’ attempt to buy Ten cheaply out of receivership failed in 2017 – creditors preferred the look of America’s CBS, given its experience.

CBS itself was taken over by Viacom last year – it was called a merger.

The vast CBSViacom conglomerate is now doing the obvious thing with a tiny investment at the other end of the world – cutting the cloth to fit.

It would be a brave soul to bet there won’t be more cutting.