Australia’s Broadcasters Foresee Savings From Canceled Sports Events

Patrick Frater

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Australian broadcasters see the potential for significant cost savings in the current year, if major sports events are canceled and remain off air.

Nine Entertainment, in a statement on Monday, said that it aims to cut $163 million (A$266 million) from its cost base this calendar year as a reaction to the economic crisis caused by the coronavirus outbreak.

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Powered by massive commodity exports and close business links to China, Australia had enjoyed some 18 years of economic expansion. That has almost certainly come to an end, as the world heads for a recession caused by travel restrictions and stay-at-home measures ordered by governments to combat the spread of the virus. Australia has recorded more than 4,200 coronavirus cases and 18 deaths.

Nine said that it would save $80 million (A$130 million) of broadcast rights costs in the calendar year to December 2020, if the National Rugby League season is scrapped. Nine has a financial year which runs from the beginning of July to the end of June, meaning that the savings would be spread over two reporting periods.

Earlier this month, it emerged that broadcast rival Seven Media would be reimbursed its broadcast fees for the Olympic Games, if Tokyo 2020 were canceled. Seven claims to lose money by carrying the games, and so would further benefit if they did not take place.

The International Olympic Committee said in February that it had set aside an $897 million reserve fund to cope with possible cancellation. Last Tuesday, the Summer Games and the Paralympics would both be postponed to a still undecided date in 2021.

In its Monday statement, Nine said that it would make other cost saving measures this year, including $17.2 million (A$28 million) of other content savings, and $41.7 million (A$68 million) of operational changes such as travel, bonus and commissions cancellations. Most of the company’s staff is now working from home, though its newsrooms remain open and operational.

The company reported that the advertising outlook is uncertain, “with likely material negative impact from April,” though viewing of linear current affairs programming has increased significantly since Australia’s lockdown. “Nine News” has recorded a 30% increase compared with late February. “Today Show” audiences are up 26%.

Similar gains have been made across its digital products, Nine said. And it reported unquantified gains at its two streaming platforms. “Both Stan and 9Now are reporting accelerating growth in subscribers/users and usage,” it said.

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