Cuts on Seven’s agenda

Stokes says cost of rights can’t keep rising

Seven West Media says it will continue to make cutbacks to meet the spiralling costs of AFL rights after it revealed a $744.3 million full-year loss.

KERRY Stokes’ Seven West Media – owner of the high-rating Seven Network – has taken aim at sporting chiefs, saying TV networks can’t endlessly keep forking out more money for Olympics and AFL broadcasting rights.

The network yesterday revealed it had made further cutbacks to counter the spiralling costs of its AFL package as it swung to a full-year loss of $744.3 million. Seven West chief Tim Worner said the cost of getting the rights to the best sports was now at a “tipping point”.

“Sports rights are undeniably valuable, but free-to-air broadcast also brings incredible value to these sporting codes,” Mr Worner said.

“Given changes in the market, price rises are not sustainable. I think it’s fair to say that sports rights have reached a tipping point in this country.”

He said future such negotiations needed to reach a position “where the economics stand up for all parties”.

The network chief also said the power and reach that freeto-air TV brings to sports needed to be recognised.

Mr Worner was backed up by his chairman, Kerry Stokes, who said sports such as the Olympics, Australian Open tennis and AFL provide exposure to millions of viewers.

“However, some of these contracts we entered into in the past do not reflect the current market conditions,” Mr Stokes said.

At the same time Mr Worner has forgone $450,000 in perks, reducing his total pay to $2.74 million for the year to June 24, down from $3.19 million in 2016.

He also revealed he opted not to receive any short-term incentive payments for the year.

“I feel as though it hasn’t been a stellar year for the company and as such I didn’t ask for a bonus,” he said.

Seven suffered a torrid year after an affair Mr Worner had with former executive assistant Amber Harrison was made public in December.

The full-year loss came on the back of $988.8 million in writedowns, including a $432.4 million reduction in the value of Seven’s television licence. The media group made a $184.3 million profit in the preceding year.

Seven West shares yesterday dipped 2.5 per cent to 77¢.