Yesterday, Seven West Media announced its financial results for 2023, which saw the group report revenue of $1.488 million (including share of associates), down 3% on the prior year. SWM’s net debt of $249 million was down slightly from $256 million in the prior period. During the year, the group repurchased $15 million of shares under its on-market buy-back which will continue into FY24. The group also determined that the dividend will remain on hold given prevailing market conditions.
Other key takeaways included:
• Seven being the #1 national total TV network
• National TV reach driving revenue share (excluding Olympics) and partially offsetting the 7.9% decline in the total TV advertising market.
• On-year growth to <1%
• NBCUniversal content driving digital audience growth, on track for two billion minutes annually with step change from digital sports rights (cricket, AFL) commencing in September 2024
• Content, platform and enabling investments ongoing and will drive digital leadership
Following this announcement, Mediaweek caught up with Seven West Media’s managing director and chief executive officer, James Warburton, to discuss what these results mean for the company.
“We’re really pleased with the early results of FY 24,” said Warburton. “We seem to be above or around our share target of 40%. We have very strong cost discipline, so even with our NBCU investment for 7Plus, FY 23 was 1% cost growth which is a credit to Jeff Howard and the finance team.
“Our NBCU content is driving 2 billion minutes. That video market we see as being worth $6.5 billion by FY 27, so that is really important for us.
“Our strong digital growth was 17% when you strip out the Commonwealth Games and the Olympics. Five years ago, our digital earnings were 2% of the company, now it’s 49% of the company, which is very good.”
Seven’s World Cup commentary team
The elevator pitch for Seven West Media Investors
When asked what the elevator pitch was to investors, Warburton said it’s that the company is in a strong position moving forward, thanks especially to sports streaming.
“We’ve got a very strong balance sheet, with growing revenue share and have completely rebuilt our schedule. We now also have a national proposition that can compete and win in the total television market.
“What the Matildas is showing, what the Test Championship showed, is that sports streaming on free to air is out of this world. With the AFL and cricket deals locked in long term, growth in the digital market for Seven will be incredibly powerful as we go forward.
“We also need to see the market recover, which we believe it will. We presented at the Macquarie Conference showing how after every downturn the market came back, and it comes back in a different way, which is probably a bit more digital. We’re in very good shape to take advantage of that and grow our share to 40% in FY 24.”
“Economics over ego”
One key point of the financial results was the success that Seven has had through its content deal with NBCUniversal which has seen positive results in both linear and BVOD platforms.
“We’ve got a fantastic relationship with NBCU. The Bravo channel launched 16th out of 19th. It basically is now the sixth OTT channel or DTT channel. The fact is, we’re getting to 2 billion minutes from NBCU. It is really important content for us and is locked up long term. Our relationship will only get stronger with them.”
Below Deck Down Under
Warburton said that Seven is focused on having a disciplined approach to broadcast rights deals, and will wait for the right opportunity. He pointed to both the Olympics and the FIFA Women’s World Cup as examples.
“We’ve been very focused; we have said for a fair while ‘economics over ego’. We’ve been extremely financially disciplined in any deal that we’ve done, and been prepared to walk away from things like the Olympics where we would have racked up massive losses.
“[About] The FIFA World Cup, we identified the Matilda’s at Tokyo where we saw the absolute love Australian audiences have for the Matilda’s.”
The outlook for FY 24
When asked about the outlook for the next financial year, Warburton pointed to the strong slate of content scheduled as a reason to be optimistic moving forward.
“When you look at this year, particularly with The Voice over the top of The Block, and with a number of tentpoles at the back end of the year, we are ending the year well. Sometimes we probably didn’t end the year on a strong note, whether it was due to Covid or costs.
“Now, We’ve got tentpoles and really fantastic content running all the way through to the back end of the year. We have a dramatically improved BBL (big bash league). We’re delighted with the shorter and sharper BBL, with reduced matches and more of a focus on primetime games.
“The first quarter of the year, we only really competed on Sundays and Mondays. We now have a schedule locked in that goes all the way through Sunday, Monday, Tuesday, and Wednesday, which will have a dramatic upside for us.”