Self interest is holding back reform, says Nine

The Australian | Darren Davidson | 10 October 2015

Nine chairman David Haslingden has renewed calls for media ­reform, saying deregulation is being held back by the “self-interest of the players in the industry”.

Addressing shareholders in the company’s annual report, Mr Haslingden said media operators had “stalled the process of bringing this legislation into the ­modern era”.

“The logic is unquestionable. You can watch our National Nine News on across the country at 6pm, but not on your television in some regional licence areas,” he said. “We ­remain hopeful that media policy will be updated and we will work with the government as an industry to hasten this ­process.”

Mr Haslingden wants to see the end of the reach rule, which stops broadcasters reaching more than 75 per cent of the Australian population thereby preventing mergers between metropolitan and regional networks.

While Mr Haslingden does not go as far as naming any opponents of a government reform program in his comments, he can only be ­alluding to Seven West Media and News Corp, publisher of The Weekend Australian.

Seven and News Corp have called on the government to pursue a comprehensive and balanced package of reforms that reflects a broader media landscape, however, neither company has expressed outright resistance to deregulation despite Mr Haslingden’s suggestion. The Australian media sector has been characterised by a deep split ­between the main players over a narrow set of policy changes proposed by former communications minister Malcolm Turnbull, which risked handing an unfair advantage to some operators.

It comes after new Communications Minister Mitch Fifield yesterday restated his deregulation agenda amid meetings with media bosses about the current ownership and concentration rules.

Chief executive David Gyngell joined his chairman’s calls, saying the $640 million sale of Nine’s events business had strengthened the balance sheet for deals.

“The sale has left Nine in a net cash position that has created ­significant opportunities to lift ­returns to shareholders but also the ability to move swiftly and convincingly when new opportunities arise,” he said.

“We continue to support the review of media ownership regulations that has impeded the progress of the industry for years.

“The barriers to change are ill-conceived, as all the players seek to position themselves optimally and similarly hinder their competitors. Change is inevitable however, as the rules can be described as nothing other than outdated with new technology.”

After a first-half fall of 3 per cent in the free-to-air metropolitan advertising market, Mr Gyngell said conditions returned to low single-digit growth in the June half. “Positively, we have seen modest growth for the first couple of months of the new financial year,” he said. But Mr Gyngell cautioned that while Nine managed to grow revenue share by 0.2 percentage points to 38.9 per cent, he expected “a slight decline in overall share in the current year” amid intense competition from the other networks and audience fragmentation in a disrupted media sector.

Mr Gyngell’s pay has fallen from the stratospheric heights of last year when his remuneration made him the industry’s top earner, with a salary totalling almost $19.6m including $14m worth of incentives.

In the past financial year, Mr Gyngell settled for less than $4.5m including fixed remuneration of $2m. He can give 12 months’ notice from November 1 this year — and on December 11 his second last lot of share rights, worth about $1.1m, can be sold. The annual report states Mr Gyngell plans to sell out as early as he is allowed.

Stripping out hefty writedowns, Nine’s profits fell 2.9 per cent to $140.1m on revenue of $1.6 billion — up 2.6 per cent. On a headline basis, Nine plunged into the red with a $592.2m loss from continuing operations after last year’s inaugural $63.7m profit, driven by $732.2m in asset writedowns. The board declared a final fully franked dividend of 5c payable on October 19, bringing the fiscal year’s distribution to 9.2c.

View the article on The Australian.