Advertising slump creates uncertainty in TV land
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Tuesday, 18 September, 2001 - 22:00
CHANNEL Nine Perth has emerged from tough closed-door negotiations with Kerry Packer’s Nine Network after thrashing out a deal over the cost of television programming.
The Perth operation is the major asset of Eva Presser’s Sunraysia Television, and is one of two Nine Network affiliates in capital cities not owned by parent company Publishing & Broad-casting.
The sensitive negotiations, which occur on a regular but undisclosed basis, have come at a time when both parties are feeling the effects of what is considered the worst advertising market in at least a decade.
Last month, PBL reported a 3.6 per cent profit slip to $312 million for the second half of fiscal 2001, the worst figure since 1991.
Ms Presser was on her way to Perth when Business News sought comment on the dealings, but at least one industry insider indi-cated the talks were as tough and drawn out as ever.
“It’s always an interesting time … the largest cost for any station is programming and lengthy discussions are commonplace,” an industry source said.
Sources ruled out speculation that PBL may have used the negotiations as a way of softening up Sunraysia for a takeover.
Australian Stock Exchange announcements show Ms Presser’s beneficial interest in Sunraysia changed last month for the first time in five years, though the changes appear minor and it is unclear whether she increased or decreased her stake.
“They (the Nine Network) can’t squeeze Eva Presser out because she owns more than 50 per cent and she can’t be pushed. She’ll go when she wants to go,” an industry analyst said.
“Why would Packer want to own Nine in Perth when he owns Sydney, Melbourne and Brisbane. Perth represents only 9 per cent of the population so he can virtually control Nine Perth without owning it.”
It’s understood Ms Presser is in Perth this week to discuss a range of issues, including the very flat advertising market and possible future business moves.
Channel Nine Perth and Adelaide both negotiate a rate for programming based on a fixed percentage figure tied to the size of their market.
It’s understood Nine MSN has been through similar negotiations with the Network, which have only recently concluded.
The situation with the Nine Network and affiliates is mirrored in the US market where there are hundreds of affiliate stations to the major networks.
On Tuesday, Kerry Stokes’ Seven Network was relatively upbeat about the outlook for the advertising market this year after posting an 81 per cent fall in net profit, largely because of losses on new business ventures and higher taxes.
Its core broadcast business recorded a solid performance despite the tight advertising market due to cost controls, better ratings and the high ratings impact of the Sydney Olympics.
The Perth operation is the major asset of Eva Presser’s Sunraysia Television, and is one of two Nine Network affiliates in capital cities not owned by parent company Publishing & Broad-casting.
The sensitive negotiations, which occur on a regular but undisclosed basis, have come at a time when both parties are feeling the effects of what is considered the worst advertising market in at least a decade.
Last month, PBL reported a 3.6 per cent profit slip to $312 million for the second half of fiscal 2001, the worst figure since 1991.
Ms Presser was on her way to Perth when Business News sought comment on the dealings, but at least one industry insider indi-cated the talks were as tough and drawn out as ever.
“It’s always an interesting time … the largest cost for any station is programming and lengthy discussions are commonplace,” an industry source said.
Sources ruled out speculation that PBL may have used the negotiations as a way of softening up Sunraysia for a takeover.
Australian Stock Exchange announcements show Ms Presser’s beneficial interest in Sunraysia changed last month for the first time in five years, though the changes appear minor and it is unclear whether she increased or decreased her stake.
“They (the Nine Network) can’t squeeze Eva Presser out because she owns more than 50 per cent and she can’t be pushed. She’ll go when she wants to go,” an industry analyst said.
“Why would Packer want to own Nine in Perth when he owns Sydney, Melbourne and Brisbane. Perth represents only 9 per cent of the population so he can virtually control Nine Perth without owning it.”
It’s understood Ms Presser is in Perth this week to discuss a range of issues, including the very flat advertising market and possible future business moves.
Channel Nine Perth and Adelaide both negotiate a rate for programming based on a fixed percentage figure tied to the size of their market.
It’s understood Nine MSN has been through similar negotiations with the Network, which have only recently concluded.
The situation with the Nine Network and affiliates is mirrored in the US market where there are hundreds of affiliate stations to the major networks.
On Tuesday, Kerry Stokes’ Seven Network was relatively upbeat about the outlook for the advertising market this year after posting an 81 per cent fall in net profit, largely because of losses on new business ventures and higher taxes.
Its core broadcast business recorded a solid performance despite the tight advertising market due to cost controls, better ratings and the high ratings impact of the Sydney Olympics.