Seven West Media chairman Kerry Stokes and CEO James Warburton spoke at the AGM yesterday and confirmed the Seven strategy outlined by Warburton at the recent 2021 Upfronts.

Both made short presentations and Stokes fielded a number of shareholder questions from the value of the shares to editorial questions about The West Australian.

Kerry Stokes and James Warburton

“The meeting marks the end of what has been the most tumultuous year in history for Seven West Media, the rest of the media sector and global economy as the Covid-19 pandemic impacted all of us,” said Stokes.

The chairman detailed how the initial plan he and Warburton signed off on in late 2019 was disrupted first by bushfires and then Covid.

“The unprecedented set of difficult economic conditions flowing from the pandemic brought more urgency to our plans to reinvigorate the group and we had to make very difficult decisions to shore up our business to withstand the economic shocks.

“This work continues with the divestment of non-core assets, a sharper focus on our cost structure, a refreshed programming schedule and content across all of our platforms.

“Sadly the cost-cutting has resulted in the departure of many valued staff who have made significant contributions to the group over many years. They have our greatest respect and we wish them well in the future.”

“Our management team are preparing a very exciting programming schedule for 2021, have successfully re-negotiated our rights contracts in AFL and horse racing, with other sports and programming contracts identified for new arrangements.

“We believe these measures and others being put in place will put Seven in a long-term winning position, and we are best placed to be the first and strongest to recover from the current difficulties.”

Stokes on Zempilas and climate change at The West

Kerry Stokes was re-elected to the board, however in answer to a shareholder’s question he indicated the Seven West Media board could appoint an independent chairman at some time.

In answers to other questions, Stokes re-affirmed Seven wanted to keep the cricket and that building profits will be the key to improving shareholder value. Stokes denied that Basil Zempilas got preferential treatment from The West Australian during the election campaign for Perth Lord Mayor and he said neither The West Australia nor Seven were climate change deniers.

Warburton on how things started to improve – quickly

When James Warburton spoke he again outlined the moves made when he arrived:

“Fifteen months ago, we were in a tough spot. Our primetime television schedule was tired, stagnant and stale. Revenue in our core offerings was in decline. Cost reductions weren’t keeping pace with revenue, and we were stuck with uneconomic sporting contracts. Seven’s BVOD offering was a distant #2 and WAN’s digital offering was in the early stages of rollout. We were also hampered by significant debt levels.

“In August 2019, we embarked on a strategy to address all of these issues. The strategy had three pillars: content-led growth, transformation, and addressing our capital structure and exploring M&A.

“In FY20, we simplified the management structure of Seven West Media and appointed a new executive team.

We also made other transformative changes:

• We departed from our internal production strategy for key tentpole shows and launched a completely refreshed prime time line up which we believe clearly positions us to win

• We implemented $170 million of annualised gross cost saving initiatives, including the renegotiation and extension of the AFL contract

• We prioritised our digital strategy and reinvigorated our 7plus BVOD platform, securing the #1 position in about 12 months, and turbo-charged WAN’s digital subscription push

• And we secured proceeds of $150 million from the sale of assets to reduce debt.

“The reality of 2020 has turned out to be completely different. We thought our new tentpole programming strategy would take six months to come to fruition, but it’s not what happened.

“We had to delay filming of Home and Away. We weren’t expecting to lose the AFL for eight weeks. We weren’t expecting an Olympiad without the Olympics and Paralympics.

“We weren’t expecting that we would be forced to delay Holey Moley for six months or that we would lose Australia’s Got Talent entirely. It should be on air right now.

“Covid didn’t single us out, but it certainly affected us significantly more than it did our competitors.

“However, our new content-led growth strategy of outsourcing known and tried international formats kicked off in June this year and things started to change – quickly.

“We moved from almost five share points down in the first half to more than 2 points up in the second half, which is a remarkable turnaround in the TV business.

“The resurgence was led by our refreshed and rebooted Big Brother, coupled with the return of the AFL.

“Big Brother was a runaway success and we followed it up with a new version of Farmer Wants A Wife and now SAS Australia, which launched as the number one entertainment show in October. It’s been too long since Seven launched back-to-back hits, let alone three key new tentpole shows.”

Debt reduction: Active sale process underway

“The second strategic pillar focuses on the transformation of SWM and we have made significant progress in that area.

“In FY20 we delivered $170 million in permanent gross cost reduction initiatives across the business, with the majority of these savings to be realised in the 2021 financial year.

“Temporary savings initiatives of $51 million were actioned in March which helped limit the impact of Covid-19 on the business.

“The combined outcome of these savings has been transformational, resetting the business’s cost base, simplifying its structure, optimising processes, reducing headcount and addressing uneconomic contracts. We have started the transformation, but we are not finished. We’re targeting $30 to $50 million in further cost out initiatives in FY21 which will be incremental to the savings actioned in FY20.

“We have also made significant headway on our third pillar, capital structure and M&A. The total proceeds from asset sales in FY20 were $150 million, including the sale of Pacific Magazines.

“We have active sale processes underway with the proceeds to be used to work down debt. We’re at an advanced stage with those asset sales and will update the market in coming months.

“During the 2020 financial year we reduced net debt to $398 million, compared to $564 million at the end of FY19.”

Ad revenue down 5%, but holes in schedule fixed

Regarding a trading update, Warburton said: “We are confident that the slate we outlined at our upfront will ensure Seven is absolutely competitive in 2021 and beyond.

“Competitive content drives revenue. So far in FY21 we’ve seen strong revenue share performance when we’ve delivered engaging content. The holes in our schedule are fixed for 2021. When content works share follows, with each share point worth $22m per annum.

“The market has improved since the August results but remains short and volatile. The Metro FTA market was down 5% YoY for the period from July to October. Over the same period, the BVOD market continues to grow strongly, up 37%, with 7plus capturing share and growing 62% in that period.

“Forward bookings suggest Seven’s advertising revenue for the first half could be down approximately 5%.”

Nine Entertainment Co CEO Hugh Marks explained at the AGM how 2020 had impacted the group in different ways.

“On the screen, you will see the performance of the various parts of our business and the obvious benefits of our portfolio of assets,” said Marks. “What you will see is that some businesses have thrived through the Covid period, particularly our subscription-based businesses, whilst others were negatively impacted by the short-term weakness in the ad market.

“In the three months since we last updated you on trading conditions, the underlying ad market has markedly improved since our August update.

“At the August result, we commented that we expected Q1 FTA revenue to be down around 15%, an estimate which proved broadly correct.

“However, since the end of September, the FTA advertising market and Nine’s share of that market, have both improved significantly, and with the added benefit of major event timing (State of Origin and NRL Finals), Nine’s December quarter is now expected to show growth in Metro FTA advertising revenue of around 15%.

“Meaning that we now expect Nine’s Metro TV ad revenues in the December half to be broadly flat on the prior period, and 9Now revenues in the December half to be up around 25% on the prior period.

“After a stronger start to calendar 2020, the challenges relating to Covid-19 heavily impacted on the property market and Domain through the fourth quarter. Notwithstanding an overall listing market that was down in the double-digits, Domain benefitted from its newly introduced pricing model, increased depth penetration and ongoing cost focus.

“First half FTA costs will be down in the double digits. We do expect second half FTA costs to increase on last year’s as a result of the return of the NRL, which was absent through the second half of FY20, as well as some reinvestment in content to support the continued recovery of advertising markets. Overall, we are expecting full year Free To Air costs to be down around 4% on FY20, prior to any revenue-related costs.”

Trading has recovered quickly after Covid impact

“We are certainly trading more positively than we would have anticipated just three months ago and are very pleased with the operating performance and trends in each of our business units. Despite this, given our limited visibility on the second half advertising market, we do not believe we are in a position to provide guidance on earnings for the full year. We expect to be in a better position to address this at our half year results in February.

“What we have now should not be under-estimated. Our television business spans both free – through the Nine Network and broadcast video on demand through 9Now; and subscription through Stan. Not only does this mean that we have multiple routes to video audiences, but it also enables us to think differently about the content we pursue. We can now focus on making content decisions for the benefit of all of our television platforms, and optimising the value of that audience to the most desirable platform. A significant shift in how we assess our content investments. This enables Nine to benefit from both continued growth in television consumption as well as the shifts in viewer behaviour.”

How Stan and Nine will combine on sport

“Our recent foray into Rugby Union is perhaps the best example of the latter. Through its relationship with Nine, Rugby Union has secured television coverage for all of its matches – providing Rugby Australia with important Free To Air coverage of a range of its key games and increasing the profile of Rugby Union in Australia. Of course, as the broadcaster, Nine will also support the game through the news and other content, using the strength of all of our assets to promote the sport.

“This is effectively a ‘service’ that only Free To Air can provide. For Nine, it means we can address a valuable and passionate sports audience through Stan’s entry into the sports subscription market, providing us unique optionality as the content market continues to evolve over the next decade, an option we could not have pursued a couple of years ago. We expect Stan Sport to be a valuable addition to our broader television business as we continue to evolve into the future.”

Reader revenue key to future at Nine Publishing

“The other arm of our business is Publishing, primarily our Metro Media business, which is becoming increasingly digital and is not far from the tipping point where digital will outweigh print. Already reader-based revenue, which is pretty much everything ex advertising, accounts for 60% of the total and is eminently more defensible, and stable.

“We have made much progress already, but there is more to do. Firstly, we aim to reduce the cost base of our legacy Broadcast and Publishing assets by around $230m, ensuring they are fit for purpose. We now have a detailed blue-print to reach this target by 2024. Already, we have initiatives in place that will deliver around 80% of this cost out target.

“Secondly, through growth in our digital assets, we aim to source at least 60% of our Group EBITDA from digital sources – Stan, 9Now, as well as the digital components of Domain and Publishing. With the recovery in Free to Air markets occurring more quickly and steeply than we previously expected, it is possible this will retrace somewhat in the current year from the near 50% we reported in FY20. However, this longer term goal remains intact.

“Thirdly, we expect more than 35% of Group revenues will come from subscription – Stan, and parts of Domain and Publishing, thereby reducing our exposure to advertising markets.

“And finally, we are targeting around 30% of Group revenues from VOD. So that’s SVOD through Stan, already a $1.5b market, and BVOD through 9Now, which at this stage is a relatively small subset of the broader $1.2b digital video market.”

Ovato Limited, one of Australia’s largest print and distribution businesses, has announced a plan for a $40 million rights issue and restructure aimed at saving 900 jobs in the Australian manufacturing industry.

The plan would provide a viable future for Ovato and prevent possible insolvency. The plan includes 300 redundancies primarily through the closure of the Clayton printing plant in Melbourne.

The majority Ovato shareholder, the Hannan family, and a Mercury Capital entity Are Media Pty Limited have agreed to underwrite $35 million of the rights issue. Michael Hannan is Ovato chairman.

The Scheme is subject to completion of the rights issue and approval by creditors and the Supreme Court of NSW.

Michael Hannan

The Managing Director of Ovato, Kevin Slaven, said:

“Print-based industries have been significantly affected in recent years and the COVID-19 pandemic has increased the pain this year for many parts of our group.

“Our industry has gone about as far as it can with mergers and consolidations in the last five years. Ovato has suffered losses for several years because of the costs of measures to meet the reduced demand for printed communications. This restructure allows for the company to get back to profitability and a sustainable future.

“Unfortunately, it means that over 300 employees will lose their jobs. However, the restructure will save 900 other jobs because the company would be facing an uncertain future without the restructure we are proposing.”

“The scheme will reduce our cost base, make us more sustainable and provide customers, suppliers and the 900 remaining staff certainty around a viable and profitable future.”

Ovato operates in Australia and New Zealand with print, distribution and marketing services. Ovato made a net loss after tax of $108.8 million last financial year, on revenue of $539.3 million.

Creditors will meet on 30 November. All Ovato businesses outside of the Australian print operations are unaffected by the restructure. Many hundreds of jobs in the downstream distribution industry will not be affected.

See also: Ovato chair Michael Hannan’s plea for manufacturing sector support

Co-edited by the Good Weekend and Traveller teams and set against the backdrop of Covid-19 restrictions, the 30th annual edition, which runs at 64 pages, features weekend escape ideas from every state and territory, and reviews of accommodation from luxury adults-only to family friendly.

The short break has changed markedly over the three decades since Good Weekend published its first 52 Weekends Away issue on November 17, 1990. And as borders re-open, Australians are set to tour their own country like never before.

“Thirty years ago, a weekend away meant driving for an hour to a fibro shack in a sleepy beachside town, where we’d put home-made spaghetti bolognese and a bottle of red on the table and call it dinner,” said Good Weekend editor Katrina Strickland. “Today we fly or drive; stay in everything from fibro shacks to upmarket city hotels; and often choose our destination according to its foodie cred.

“Just as the weekend away has evolved over the three decades in which Good Weekend has been publishing this annual issue, so too has 52 Weekends Away. Today it covers every state and territory and a vast range of accommodation. Covid-19 might have disrupted our international travel plans but the silver lining is the way it’s turned the spotlight onto our own backyard. There are so many places nationwide that I’ve been dying to visit but haven’t quite got to. 2021 is the year I will – and I’ll be using this issue as my guide.”

Good Weekend 52 Weekends Away edition

The cover features a painting by Melbourne artist Tom Adair, which depicts the ocean pool at Bronte Beach, Sydney. Adair says he wanted to capture how central water is to our sense of identity. Good Weekend, together with Adair and his Sydney gallery, Nanda\Hobbs, are releasing 50 limited edition prints of the painting which can be purchased here. 

The edition also has major sponsorships from both Destination NSW and Tourism Tasmania, which have taken advertising false covers on the front and back of the magazine. There’s an eight-page mini-magazine insert and sponsored content from Destination NSW revealing some of the hidden getaway gems of the state, and a seven-page advertorial from Tourism Tasmania delving deep into the Apple Isle’s off-the-beaten-track spots.

Good Weekend 52 Weekends Away edition will be available in this Saturday’s edition of The Sydney Morning Herald and The Age, and online at traveller.com.au.

The only casting awards ceremony in the southern hemisphere that celebrates and recognises casting across all mediums including film, television, advertising and theatre and online content, the winners will be announced at the virtual ceremony via Facebook on Saturday 28 November.

Hosted by Bert and Amanda LaBonté, the Awards seek to acknowledge and support the critical role casting directors play in bringing together great casting opportunities both on a national and international stage.

CGA President David Newman said: “In uniquely trying times, very brave producers have found ways to keep industry practitioners employed and engaged. Casting Directors have hugely appreciated all those efforts and been there every step of the way to support that process. The CGA nominations for 2020 represent that persistence and dedication to adapt. We’re immensely proud of the resilience of all the nominees and indeed all members and look forward to celebrating their achievements at our upcoming Awards.”

2020 CGA Award nominees include:

Best Casting in a TV Comedy
Black Comedy S4 – Anousha Zarkesh
How To Stay Married S2 – Nick Hamon
The Other Guy S2 – Kirsty McGregor & Gemma Brown
UPRIGHT – Nathan Lloyd

Best Casting in a TV Drama
Mystery Road S2 – Anousha Zarkesh
Neighbours – Thea McLeod
The Heights S2 – Annie Murtagh-Monks
Wentworth S8 – Nathan Lloyd

Best Casting in a TV Miniseries & Telemovie
Deadhouse Dark – Stephanie Pringle & Alison Fowler
Halifax: Retribution – Nathan Lloyd
Operation Buffalo – Anousha Zarkesh
The Secrets She Keeps – Amanda Mitchell

Achievement in Casting
100% Wolf – Kirsty McGregor
Guy Sebastian ‘Standing With You’ – Daisy Hicks
Holy Holy ‘Maybe You Know’ – Mel Mackintosh
The InBESTigators S2 – Nathan Lloyd

With two months of the year still remaining in 2020, Australians are spending an average of 46% more time reading online news each month when compared to the same time last year.

ABC News websites retained the top position, with a unique audience of 11.8 million for the month of October 2020.

News.com.au ranked second with a unique audience of 10.8 million, followed by nine.com.au in third position, up from fifth on last month, with a unique audience of 9.9 million. 7NEWS ranked fourth with a unique audience of 9.5 million. Daily Mail Australia ranked fifth with 9.4 million.

The Australian returned to the top ten with a unique audience of 3.3 million in October 2020.

By Andrew Mercado

It’s also good to see Aussie comedy travelling the world, but how do we feel about Australia becoming an international joke for its news coverage? Sky News Australia will end up a bigger cheerleader for Donald Trump than Fox News, and it appears to be the only news network outside of the US legitimising his unproven claims of voter fraud. Although they might be sympathetic in Slovenia.

Thanks to Sky News Australia’s rapidly growing YouTube channel, millions of Americans can now watch Alan Jones reading out conspiracy theories from obscure blogs. In the words of the man himself, Sky News Australia should just “do us all a favour” and change their name to Sky News America.

The fall of the Trumps will lead to multiple documentaries and let’s hope they are as revealing as The Reagans (Monday on Stan). The Showtime four-part doco series rips apart the couple’s “Hollywood myth making” and looks into the casual and blatant racism that helped propel Ronald to becoming President.

Crazy, Not Insane (Wednesday Nov 25 on Foxtel) is the new Alex Gibney documentary which follows Dr Dorothy Otnow Lewis, a psychiatrist who treated serial killers to check their mental capabilities. She challenged the notion that people are born evil and discovered that many were severely abused as children, with some suffering from full-on dissociative personality disorder.

Crazy, Not Insane is fascinating but also disturbing, especially when it delves into the party atmosphere of audiences waiting outside state executions. It’s another winner though from HBO which has been smashing it lately with true stories like this. Also recommended – Class Action Park (Binge), the wild New Jersey theme park where the rides regularly killed people.

Enjoy watching The Crown (Sunday on Netflix) this weekend. Can’t wait to see Gillian Anderson as Margaret Thatcher, or Spain standing in for Australia when Charles and Di tour down under.

By James Manning

Primetime News
Seven News 943,000/930,000
Nine News 832,000/820,000
ABC News 681,000
10 News First 304,000/205,000
SBS World News 162,000

Daily current affairs
A Current Affair 642,000
7.30 601,000
The Project 281,000/416,000
The Drum 179,000

Breakfast TV
Sunrise 260,000
Today 228,000
News Breakfast 193,000

Thursday TV

Seven: Home and Away dipped to just under 500,000 after three nights above that mark.

Britain’s Got Talent then had another modest crowd with 215,000 watching.

— 

Nine: A Current Affair returned with 642,000 after a night off due to State of Origin.

The final weeknight episode of The Block, and the third-last before Sunday’s reveal and then the auctions a week later, had 748,000 tuning in. Despite the mid-season disruption the series has managed to deliver again for Nine, although it’s biggest challenge, the auctions, is yet to come.

A Paramedics repeat then did 399,000.

—

10: The Project had a second successive night close to 400,000.

The return of Jamie’s Quick & Easy Food was on 267,000 after returning on Wednesday with 272,000.

—

ABC: Laura Tingle was guest-hosting 7.30 with 601,000.

Scottish Vets Down Under then did 373,000 followed by Joanna Lumley’s Silk Road Adventure on 359,000.

—

SBS: A repeat of The Great Fire of London did best with174,000 at 7.30pm.