Can Nine afford to buy other cities? The Australian reports Nine is set to buy its Adelaide and Perth affiliates if the 75% reach rule is eased after the election. But it didn’t mention what WIN paid for the two stations back in 2007. Odd, especially with reports last week that Nine’s two US hedge funds are not happy about the network matching Ten’s big bid for the cricket rights (supposedly $450 to $500 million).
A quick google reveals WIN paid $105 million for the Adelaide Nine station in 2007 and overbid PBL Media (which was the forerunner of the current Nine Entertainment at the start of the unsuccessful CVC ownership regime) for STW9 in Perth and paid $163 million (PBL offered just over $135 million). So all up Nine has to find more than $200 million for the two stations (both are not worth as much as WIN paid back in 2007, so badly have they been run and so weak have their ratings performances been in the face of domination by Seven). If Nine wants the cricket it will have to find either enough money to match Ten, or try and pinch some of the coverage. But that would cost hundreds of millions of dollars.
The WIN buys, if they happen, will have to be financed via an increase in bank debt — Nine isn’t debt-free as CEO David Gyngell asserted last year — with the owners reportedly imposing a $700 million refinancing package on the network. If that is not fully drawn down, some of the money could be diverted to the WIN deal and to help finance a cricket deal. In any case, Nine’s debt will still be $700 million to $1 billion if the deals are done, at a time when ad revenues are weak and rate increases spare and cost cuts have gone about as deep as they can go without starting to destroy operating efficiency. Rivals Ten and Seven are cutting debt.
If Nine pays more than what WIN paid for the two stations back in 2007 then it will have overpaid for TV assets once again — just as the old PBL Media overpaid when it bought NBN for $250 million. That regional broadcaster remains a profitable business for Nine. Offsetting any WIN deal will be the loss of the affiliation fees WIN Adelaide and Perth pay to Nine in Sydney (Nine would get control though of the remainder of the revenues from both stations, but that would in turn be offset by the added operating costs). — Glenn Dyer
Media in a blur on footy girl. To blur or not to blur, that was the question when the TV networks scrambled with footage of the 13-year-old who started a media storm over a racist taunt at the footy on Friday. Should a child who does the wrong thing have her face splashed across the national media? Seems it’s an open question. Everyone was claiming the scoop on Saturday, and while Seven was first to put her to air in an update around 4pm it blurred her face after a request from mum. Ten’s news at 5pm didn’t bother to blur, and Nine then put her identifiable face to air in promos leading up to its 6pm bulletin (we’ve blacked out her face in these screenshots) …
The Sunday Herald Sun had its own story, though we’re not sure if there was any request not to identify the minor …
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