Southern Cross Austereo (SCA) will not sell its television assets for now, it has revealed to the market.
The company – which primarily boasts audio assets including the Hit and Triple M radio networks as well as the digital Listnr platform – said interested parties had made offers, but these bids “did not align with SCA’s valuation of the television assets”.
“Following completion of a strategic review, SCA has concluded that value will be maximised by continuing to hold its television assets,” Monday’s financial results announcement said. “Supported by SCA’s financial adviser, Grant Samuel, the review included engagement with several interested parties.”
Grant Blackley, CEO of the organisation, added that SCA is “very comfortable” retaining the assets.
“SCA’s television assets delivered an EBITDA [earnings before interest, tax, depreciation and amortisation] margin of 23.7% and a market-leading revenue-to-audience power ratio,” he said. “The business is streamlined, efficient and capital light.
“Television is also a strong marketing platform for the growth of Listnr, delivering around $10 million of in-kind marketing support in FY22. The ongoing contribution from television will support future returns to SCA’s shareholders through fully franked dividends and resumption of the current share buy-back.”
The television arm of SCA’s business had revenues of $126.2 million in the 2022 financial year, down 25.3% on the $168.9 million the year prior. Its revenue related expenses, however, were down 38.7% to $59.5 million (from $97 million) and employee expenses dropped from $21.4 million to $18.8 million, a decline of 11.9%.
It did note that in the 2023 financial year (July 1, 2022 to June 30, 2023) the TV market is thus far tracking below last year.
SCA’s primary television affiliate agreement was previously with the Nine Network, however in 2021, Nine returned to its partnership with Win.
SCA instead partnered with the lower-rating Network 10, potentially hampering its ability to generate revenues from regional television.
SCA now represents the Network 10 channels in regional Queensland, southern NSW and Victoria. It also looks after the Network 10 channels in northern NSW, Tasmania, Western Australia and Mildura, selling programming on behalf of Win.
In addition, it represents Seven in Tasmania, Seven and 10 in Darwin and remote central and eastern Australia, and all three of Seven, Nine and 10 in Broken Hill and the Spencer Gulf.
Separately, it has a multi-year free-to-air program supply agreement with Sky News Australia, which sees it broadcast Sky News content across SCA’s largest regional markets on a new dedicated 24-hour news channel.
SCA has previously flagged that its future lies primarily in digital audio, with the Listnr platform at the centre of everything it does. The company is also flirting with the idea of completely rebranding to Listnr to reflect this strategic priority.