Last Thursday, SCA chief executive Grant Blackley told Mediaweek about how LiSTNER is performing and its future exclusive content plans.
Today Grant Blackley reviews the rest of the business operations including radio ratings and the regional TV partnership with Network 10.
Flat revenue, but debt drops
Revenue has picked up from where we were 12 months ago. We were able to keep the fall to just 2.2%. We had a very positive reduction in costs. It was caused by a number of things including a restructure of the cost base across the whole company. We got some Government assistance in the first half of the year via JobKeeper. We also took some costs out in relation to contracts for TV that now reside in external broadcasting contracts.
We hadn’t reintroduced a dividend at that time and used 100% of that cash flow to accelerate the debt reduction down to a historic low of $53m. That puts our balance sheet in great shape.
New TV affiliate partner
The transition back to 10 was seamless. We were previously with 10 for about 40 years. We hibernated for five years at the Nine Network and we delivered a lot of things in a very healthy relationship with Nine for those five years. Nine didn’t want to extend that contract. We are delighted with the revenues to date [with 10]. The deal we have structured with 10 sees us forecasting an earnings neutral outcome by the year’s end. The ratings and the revenue will be different, but fundamentally the earnings will remain stable.
Melbourne office relocation
Pre-Covid we were looking at potentially moving our Sydney or Melbourne offices, or possibly both. When Covid hit we suspended that search. What we have now elected to do is extend our contract in Sydney and move to new premises in Melbourne.
The new Melbourne office remains in South Melbourne, but in Moray Street. That is good for the staff in that they can come to the same destination. We have a single floor plate for all staff who are currently spread across three to floor floors at present.
The new studios will be multipurpose for everything from breakfast and drive shows through to podcast set-ups. We aim to make them far more effective and efficient. We are looking forward to moving in the next 12 months.
2Day FM’s Hughesy, Ed and Erin
Ratings for new Hughesy, Mary and Baz shows
We did make a number of changes in some big markets this year including Sydney and Melbourne. We also launched a new Triple M station in Perth. Those were also very considered and measured investments. We will be able to nurture them as they improve. The stop-start nature of the ratings hasn’t helped the FM market. We have seen a slight migration back to talk formats. We believe all new shows are in the right place with the right people.
Investors looking at TV business
Television is making an improving contribution to our earnings. There has been media speculation we haven’t commented on in relation to an interest in our TV assets. Over time we have had offers from sophisticated and unsophisticated investors.
There is no conversation at this point in time for the sale of our TV assets.
TV makes more than just an earnings contribution. It fills out a multiplatform approach in the regions. It allows us to create a more meaningful megaphone to promote our radio shows and our digital audio assets like LiSTNR.
Have there been offers for the radio business?
There have been none that I am aware of in my time. There has been no formal approach about the radio business. People know we are a strong performer and we are the only commercial national network and our leadership in digital audio is second to none.
One more radio acquisition
[SCA has a radio division with 99 stations. Blackley said he has been trying to make it an even 100.]
I am trying to buy one more. It has proven to be quite allusive. We are a very disciplined group – we will only buy something if it is right, otherwise the radio stations will remain at 99. We won’t be buying one just for the press release.
See also: Podcast Week: Grant Blackley on LiSTNR, Turia Pitt’s new pod, Two Blokes + more