WIN and Nine are back in business

SHARES in radio and television broadcaster Southern Cross Media Group fell as much as 20 per cent on Friday – the most in 12 months – after Nine Entertainment decided against renewing a regional affiliate agreement.

Nine has instead chosen to return to former broadcast partner WIN Corporation.

Nine said it had decided against renewing the five-year agreement with Southern Cross Austereo (SCA) signed in 2016 which saw Nine content broadcast into regional Queensland, southern NSW and regional Victoria in exchange for 50 per cent of advertising revenue.

It also said it would not renew a deal that saw Southern Cross provide sales representation for Nine’s Northern NSW television station. Both deals will end on June 30.

The news sent shares in Southern Cross Media, which owns SCA, tumbling as low as $1.775. The stock recovered some ground to close at $1.98, down 10.4 per cent for the day.

Outgoing Nine CEO Hugh Marks said the company had decided to return to its former broadcast partner WIN, signing a seven-year deal that will see its content broadcast into Tasmania, regional Western Australia, Victoria, Queensland and southern NSW.

“While our relationship with Southern Cross has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine’s premium content into more regional markets under one agreement, and to work cooperatively with them on a national and local news operation, mean this is the right time for us to return to WIN,” he said. “The terms of this new affiliation agreement should be positive to Nine’s EBITDA (earnings before interest, depreciation and amortisation) from FY22 through the broader reach of Nine’s channels and by enabling incremental efficiencies across both sales and news.”

WIN – a company privately owned by Bruce Gordon – will pay around 50 per cent of its regional advertising revenue under the terms of the deal and will provide temporary sales representation for Nine in northern NSW and Darwin.

WIN CEO Andrew Lancaster said the company welcomed the new deal.

“We are pleased to be furthering our already strong relationship with Nine, through this affiliation agreement,” he said.

“Nine has clearly established itself as Australia’s leading media business and we are excited to be returning to carriage of the Nine broadcast content to our regional viewers.”

Southern Cross Media said it would soon commence discussions with Channel 10 to fill the programming gap in certain regional markets. “For more than 20 years before entering the Nine affiliation in 2016, SCA was affiliated with Network Ten in SCA’s licence areas,” the company said.

The company also said its television business continues to broadcast Seven West Media Content to Tasmania, Darwin, Central and Spencer Gulf markets under a deal in force until June 30 next year.

In the first half of the financial year Southern Cross Media’s television division booked $84.9m in revenue.