Business of Media
Seven to fight Nine over lucrative television shows
Seven West Media will try to steal popular television programs such as Ninja Warrior and Love Island Australia from rival free-to-air networks, intensifying a battle over increasingly expensive content that guarantees large audiences, reports SMH’s Zoe Samios.
The Kerry Stokes-controlled company announced on Sunday it had commissioned The Voice from ITV Studios Australia in an attempt to lock in content schedule for next year that wasn’t reliant on international production. Seven’s deal puts an end to an eight-year run of the show on rival network Nine (owner of this masthead), which had flagged last week that the show was becoming too expensive to produce.
Sources said Seven is also trying to secure Ninja Warrior, which is produced by Endemol Shine, and Love Island Australia, which is run by ITV Studios. Both shows have been on Nine Network for the last few years, but cost large amounts of money to produce.
The Voice will add to next year’s program schedule which includes Holy Moley, Farmer Wants a Wife and Big Brother. Long-standing cooking show My Kitchen Rules will not run and Seven will look at the performance of Plate of Origin before commissioning another season. Seven has been looking to outsource more of its programming to production companies as it tries to sell its studio division. Banijay, which owns Endemol, had been in talks to buy Seven Studios, the division which creates Home and Away and Better Homes & Gardens.
Cinema and theme park operator Village Roadshow hit hard by COVID-19
The coronavirus pandemic has wreaked havoc on theme parks and cinema business Village Roadshow, which was forced to close its attractions from March and, apart from Melbourne, began reopening last month, reports News Corp’s Max Mason.
Village, which has entered into an implementation agreement with local private equity firm BGH Capital, reported a net loss of $117.4 million for the 2019-20 financial year, compared with a loss of $6.6 million in the previous year.
This included a $73.9 million contribution to the loss from significant items, resulting from $92.1 million in impairments of Topgolf, Australian Outback Spectacular, Wet ‘n’ Wild Las Vegas, cinemas, film distribution royalties, marketing solutions and the film distribution business.
Revenue fell more than 25 per cent to $732.4 million. Earnings before interest, tax, depreciation and amortisation slumped more than 75 per cent to $31.1 million.
Village said it continued to take action on costs to reduce the effects of fewer visitors. It had also secured additional debt funding from existing lenders and the Queensland Treasury Corporation.
Village shareholders will vote on the BGH proposal in November. The independent board committee, lead by former Foxtel chief executive Peter Tonagh, has unanimously recommended the deal, in the absence of a better offer and subject to the independent expert’s report.
News Brands
Tech and media wait with bated breath for new ACCC code
Nine is urging the Australian competition regulator to focus on the money digital platforms should pay for journalism rather than information and notice about algorithmic changes in new proposed legislation, while Google says it is not against paying news publishers but believes the draft laws are unfair, reports AFR‘s Max Mason.
Nine’s submission is also believed to focus on clearer definitions of value created for digital platforms as well as what journalism content is counted under the code for remuneration.
Google has aggressively campaigned against the minimum standards aspects of the draft code. Google Australia managing director Melanie Silva said the tech giant was not against laws that governed the relationships between media business and digital platforms, but the draft code was unworkable.
Media companies push for clarity on tech giant payments
Australian television broadcasters are asking the competition regulator to ensure their video content will not be punished by Google and Facebook under a new regulatory code that will force the tech giants to pay media companies for news, reports SMH‘s Zoe Samios and Fergus Hunter.
Media companies are proposing several changes to a news media bargaining code being finalised by Australian Competition and Consumer Commission which seeks to level the playing field between local companies and the global tech giants.
Responses to the proposed legislation are focused on the definition of news content and ensuring that Google and Facebook don’t discriminate against publishers on other sites that they own, such as YouTube or Instagram. Discrimination could mean linking to user-generated content instead of a 7News video or not prioritising a piece of content in the YouTube search feed.
The proposed code also said that the majority of news content created by a publisher must be ‘core’ content – which is defined as stories created by a journalist that record, investigate or explain issues of significance. If the majority of a publishers’ content is ‘covered’ – stories about sports matches or entertainment – they are likely to be excluded.
Australian Community Media repays $20m of Alex Waislitz loan
Australian Community Media has paid back $20m of the $70m it borrowed from part-owner Alex Waislitz to fund the $115m purchase of the rural publisher last year, despite operating in tough trading conditions and receiving money from the federal government’s JobKeeper program, reports John Stensholt.
Waislitz owns ACM, the publisher of regional newspapers including The Canberra Times and Newcastle Herald, with his friend and media entrepreneur Antony Catalano.
Documents lodged with the corporate regulator confirmed the lending arrangement, understood to be in lieu of borrowing money at commercial rates from mainstream banks and having Waislitz sign a guarantee for any loans.
Instead, he lent the funds to the private company that now controls ACM as part of a mezzanine financing package that would likely see him paid interest on the loan at a higher level than market rates.
It is understood that at least $20m has been repaid already.
Victorian take-down proposal will erode press freedom
Prominent media lawyer and Minter Ellison partner Peter Bartlett says a proposal that would allow courts to order publishers in Victoria to take down stories would erode press freedom and prevent the media from keeping the judicial system accountable, reports Max Mason and Michael Pelly.
Last year, the Victorian Law Reform Commission (VLRC) released a consultation paper for a review of the contempt of court law. The VLRC has recommended establishing a statutory take-down order scheme as part of an amendment to the Open Courts Act. The report has gone to the Victoria Attorney-General and is being considered by the state government.
“Since the introduction of the Open Courts Act in Victoria, there’s been a significant increase in the number of suppression orders,” Bartlett, who is acting for Nine for a number of matters in its Metro Media publishing business, which includes The Australian Financial Review, said.
“The fear is that inserting provisions in the Open Courts Act allowing courts to order take-down and, even worse, interim take-down, will see a significant number of take-down orders. The NSW Court of Appeal and the Victorian Court of Appeal have both expressed the view that take-down orders should only be made in the most limited of circumstances.”
Nine signs Karl to new contract
It seems Today host Karl Stefanovic still loves the smell of morning coffee after signing a new deal with Nine, reports TV Tonight.
The Sydney Morning Herald reports he has a new multi-year deal but there’s no detail on just how much it is worth.
This follows the Sunday Telegraph reporting in May that negotiations with Nine had “stalled because the new contract is believed to offer less than half his former $3 million-a-year.”
The long haul appears to be paying dividends. While Sunrise won the week at 259,000 to Today‘s 222,00, Nine quietly bagged another win in Brisbane.
Publishing
Bauer Media could exit famed Packer headquarters
Mercury Capital’s magazine business Bauer Media is on the hunt for new office space as the lease on its famous 54 Park Street headquarters comes to an end, reports SMH‘s Zoe Samios.
The publisher of The Australian Women’s Weekly and Woman’s Day, which was formally bought by Mercury in July, has occupied the headquarters in Sydney’s central business district since the days it was run by the Packer family.
Bauer has put a brief out in the market looking for space to lease and sources suggest it could end up in office space once used by Pacific Magazines, Seven West Media’s former magazine division. Seven’s empty office has been looking for a tenant since the magazine business was acquired in May this year for $40 million.
But Bauer, soon to be renamed by its new owners as it nears completion of a management restructure, may stay in its existing headquarters if it can secure a large rent reduction. Bauer’s existing lease expires at the end of this financial year.
Television
Networks say enough TV in the can despite ‘rapidly changing situation’
Television networks insist there won’t be a shortage of fresh Australian reality programs, despite the temporary suspension of filming of The Masked Singer Australia and the fact a number of other productions are on hold for the foreseeable future, reports SMH‘s Broede Carmody.
A total of 17 cases of COVID-19 have now been linked to Network 10’s singing competition The Masked Singer, which is filmed in Melbourne. The program was shooting its finale earlier this month when production was halted after a crew member returned a positive coronavirus test. The show’s host Osher Gunsberg and the judges have all tested negative.
Gunsberg also hosts 10’s Bachelor franchise, including a forthcoming season of The Bachelorette now shooting in Sydney. A Network 10 spokeswoman said there were no changes to the season even though Gunsberg was self-isolating in Melbourne and would have to do so again when he returns to NSW. The network was tight-lipped on when season six of The Bachelorette will debut. It is expected to air around October as originally planned.
Nine (the owner of this masthead) is still scheduled to film a new season of Lego Masters in Melbourne later this year. However, a spokesman said it was too early to say how production might proceed, given the “rapidly changing situation”. Married at First Sight is also expected to start filming a new season at the end of the year, but it is not yet known if some scenes will be filmed in Victoria as in previous years.
Renovation program The Block, which returned to screens this month, has finished filming with the exception of the auctions. Executive producer Julian Cress last month told The Sydney Morning Herald and The Age he hoped the show would be able to film the auctions in November, but he was making contingency plans should restrictions still be in place.
Seven’s Australia’s Got Talent: Challengers & Champions and its mini-golf format Holey Moley are still on hold due to restrictions at international and state borders. Cooking competition Plate of Origin, which debuted on Sunday night, finished filming more than three months ago. Filming has also wrapped on the network’s forthcoming bootcamp series SAS: Australia.
The Voice: Channel 7 halves budget for The Voice after Nine’s $40m costs
Channel 7 will produce The Voice for less than half of what it was costing rival Nine, and the network is confident it can create a much better show it’s been revealed, reports News Corps’ Mibenge Nsenduluka.
Confidential understands that Network Seven will spend around $15-$20 million, much less than the $40 million it was costing Nine to produce and promote the reality singing show.
The new format is still being finalised but so far is expected to be tighter and more fast-paced, making for a less drawn out show.
Certain elements will likely disappear when the revamped version goes to air and it will be hosted by previous host Sonia Kruger.
There is no word yet on whether Seven will recruit brand new coaches and the future of Delta Goodrem, Kelly Rowland, Guy Sebastian and Boy George remains up in the air.
Struggling regional broadcasters tap partners for financial aid
Regional broadcasters asked their metropolitan affiliate television stations for financial relief earlier this year to help them cope with weak advertising conditions caused by the coronavirus pandemic, reports SMH’s Zoe Samios.
Bruce Gordon‘s WIN Corp secured a waiver from ViacomCBS-owned Network Ten in the lead up to the end of the last financial year, but Kerry Stokes-controlled Seven West Media denied a request for help from its affiliate partner Prime Media Group.
WIN Corp’s minimum guarantee was waived by Ten for a couple of months, but Prime was unable to renegotiate its agreement, sources indicate. They said Southern Cross Austereo did not request a discount from its partner Nine Entertainment Co (owner of this masthead). However, the two companies are fighting over money that was awarded to Southern Cross by the Morrison government for its commitment to regional news journalism.
Sport
Seven steps up fight as Cricket Australia triggers ‘Act of God’ clause
Cricket Australia’s high-stakes battle with its free-to-air television partner has taken another twist, with Seven West Media believing the game’s governing body has nullifed their $450 million broadcast deal by making a force majeure claim on the upcoming season, reports SMH‘s Chris Barrett.
Threatening to terminate its six-year contract to show Australian cricket because of a talent drain in the Big Bash League, Seven has briefed leading Melbourne silk Neil Young QC.
A courtroom is where the showdown between cricket and its FTA broadcaster may have to end up being thrashed out as well if crisis talks this week between interim CA chief executive Nick Hockley and Seven’s CEO James Warburton are unsuccessful.
Seven is furious at the prospect of dozens of top players being unavailable during the two-month long BBL this summer because of the plan to secure them in COVID-19 bubbles for international matches, and as it stands Warburton is declaring the network won’t turn up to televise the tournament.
It has now emerged that CA has triggered the force majeure, or ‘Act of God’ section, in its broadcast contract, which refers to unforeseen events beyond the control of either party, as it amends its originally released 2020/21 schedule.
Received as an admission the season would be affected by the pandemic, sources at Seven say an initial notice a month ago was withdrawn when met with anger at the network before another version was issued by CA in the past fortnight.
Seven executives argue the claiming of a force majeure event gives the company the right to terminate its contract, which is believed to include a clause that specifies CA must deliver matches at least equivalent with world’s best standard and at no less than the level of the previous season.
Aside from more players being absent during the Big Bash, the potential moving of the Boxing Day Test from the MCG to Adelaide, the proposed use of venues such as North Sydney Oval for BBL matches and limitations on crowds are other examples Seven may use in claiming they are not receiving a premium product.
According to sources at head office, meanwhile, CA has its own outside legal advice that it is on solid ground as long as it delivers the season as promised in terms of volume. Asked about the force majeure notice.
Cricket crisis: Cricket Australia sticks with interim boss, despite growing broadcast war with Seven
Cricket Australia is refusing to bow to Channel 7’s withering attack on its leadership, and won’t begin the hunt for a new full-time chief executive until next year, reports News Corp’s Ben Horne.
Kevin Roberts was sacked as cricket’s chief executive back in June, but his interim replacement Nick Hockley will remain in the hot seat until at least the end of the coming summer before a worldwide search is conducted.
Seven CEO James Warburton has described the current state of play with CA as a “train wreck”, but cricket administrators are standing behind Hockley, and believe he has the toughness, commercial sense and diplomatic skills to manage a relationship with Seven that has completely broken down.
Seven Network sets its sights on State of Origin rights
The Seven Network’s stoush with Cricket Australia could have major ramifications for the NRL as the broadcaster prepares to launch a stunning bid to steal State of Origin, and potentially the premiership, from rival the Nine Network, reports News Corp’s Brent Read.
Seven has threatened to walk away from their deal with CA. There are bound to be legal hurdles, but if they were able to tear up their contract, it would free up about $100 million a year.
That would leave Seven with the financial artillery to make a charge at rugby league’s commercial broadcasting rights, which are up for grabs from 2023.
While the NRL recently extended their deal with Foxtel until the end of 2027, the Nine Network dug in their heels, leaving the commercial rights vulnerable to a potential bid from the Seven or Ten.
Sources close to Seven confirmed the network was already sizing up an offer for Origin and that could extend to the premiership, depending on their financial situation in the new year.
It is understood Seven powerbrokers have also had informal talks with Foxtel over a sharing arrangement that could result in Origin being simulcast from 2023, when the NRL’s deal with the Nine Network is due to expire.
Seven is already in the process of selling assets to strengthen their bottom line and it is understood they have urged the ARL Commission to wait until the new year to begin talks with commercial broadcasters.
News Corp saddles up national racing newsroom for spring carnival
With the spring racing carnival soon to hit its stride, News Corp Australia is pooling the talents of the country’s best turf writers to create a national newsroom dedicated to serving punters’ soaring demand for coverage of the sport, reports News Corp’s Lilly Vitorovich.
The media group has hand-picked journalists from its metropolitan mastheads, and from the biggest racing news site in the country, Racenet, to form the national racing newsroom, which will launch on Tuesday.
The team of 14 journalists will be led by national racing editor Stephen Brassel, who has 30 years experience covering the industry.
The stories will feature across News Corp’s newspapers, websites and Racenet’s site.