Broadcasters get bump
Licence fee waiver puts spring in share price step
SHARES in Australia’s freeto-air TV broadcasters have surged after the Federal Government waived their licence fees this year as it pushes for broader media reform.
Communications Minister Mitch Fifield announced yesterday that the Government would use regulations to abolish $127 million in licence fees this financial year, circumventing the need for parliamentary approval.
It comes as the Government tries to win broader parliamentary support for media reform legislation that would consign the fees to history.
Nine Entertainment shares hit a year-high of $1.395 – up 4.5 per cent – in the wake of the revelation, while Seven West jumped 4.3 per cent to 73.5¢.
Regional broadcasters also shared the spoils, with Southern Cross Media, which carries Channel Nine programming in many regional markets, surging 7.1 per cent.
Shares in Prime Media, a regional affiliate to Seven West, were up 4.6 per cent.
Broadcasters called on Parliament to make the reprieve permanent.
The Government’s move is an interim measure ahead of the proposed permanent abolition of the fees that requires media reform legislation pass through Parliament.
Broadcasting licence fees would be replaced with cheaper spectrum usage charges under the Government’s media blueprint, costing the TV industry a far more modest $43.5 million.
Nine said the move announced yesterday would save it about $33 million in licence fees for this financial year that to would have been paid next year. The broadcaster forecast its full-year earnings to lift to between $200 million and $210 million, up from the $158 million to $187 million previously expected.
Southern Cross said it would save $11.8 million from the fee reprieve.
Mr Fifield said the removal of fees this year would provide relief for broadcasters who were “under competitive pressure from foreign tech companies and online streaming services”.
Free TV Australia chairman Harold Mitchell described the abolition as a relief for the industry but said a long-term financial solution was “crucial” for Australian jobs.
“In the internet age, it makes no sense to continue to impose the world’s highest licence fees when these foreign media tech companies pay nothing,” Mr Mitchell said.
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