Seven West Media to continue cost-cutting efforts
Seven West Media, the company which operates commercial broadcaster Seven Network, is to increase its cost-cutting by A$20 million ($16 million) in the next two years to offset its expensive outlay for sports rights.
The company will cut A$125 million from costs in 2017-18 and 2018-19, with around 250 jobs set to be slashed from the business’ TV operation this year.
The announcement came as Seven reported its results for the beginning of the 2017-18 financial year.
The company’s net profit for the six months to 30 December totalled A$100.7 million, an improvement on the A$12.4 million it brought in in the same period in 2016.
Seven is aiming to reduce debt to A$650 million by the end of June, following a debt total of A$710.8 million in the final six months of last year.
Seven's largest rights deal is for Australian rules’ AFL which it shares with pay-TV operator Foxtel and Telstra in a combined A$2.5-billion agreement that runs to 2022.
Commenting on the results, Tim Worner, the company’s chief executive, said: “The pace of our transformation is accelerating, as we adapt our model to a leaner, more agile company.
“The transformation of the group will also be marked by our headquarters moving to our existing premises, Media City, in Eveleigh in Sydney this year."
Worner is hoping that the recent relaxation of media ownership laws in Australia will also allow Seven to pursue some merger deals.
Last year, Seven posted a loss of A$745 million for the financial year and at the time Worner told analysts that he thought sports rights had reached a "tipping point" and urged administrators to consider the value, in terms of viewership, that free-to-air television offers.