Nine won’t ‘overpay’ for NRL rights, says CEO

Nine boss Matt Stanton says the broadcaster won’t overpay to retain the NRL rights if the financials “don’t stack up”, as the company revealed it has inked a number of AI deals through its publishing business.

The advertising market for free-to-air television has weakened since the NRL last agreed its rights deal in 2020 and the AFL secured a $4.5 billion deal in 2022, Stanton said after announcing an earnings jump for Nine of 6 per cent in the December half.

It was its second period of rising profits in a row, despite a drop in revenue in its first results since the sale of Domain Group.

“We have to work through to make sure we get a good deal,” Stanton said.

“Premium assets such as the NRL rights, MAFS [Married at First Sight] and the Olympics are still good drivers of commercial outcomes. They’re still very good assets. You just got to be very disciplined to make sure … we don’t overpay.”

Last week, Rugby League Commission chair Peter V’Landys confirmed that broadcast-rights negotiations had begun. The current deal with Nine and Foxtel is to expire at the end of the 2027 season. V’Landys has talked up the prospects of securing a similar, if not better, deal to the one struck by the AFL, despite the successive years of advertising revenue declines that have impacted broadcasters.

Nine also revealed it had signed two commercial deals with major Australian organisations to allow the use of its publishing content to train those companies’ proprietary AI large language models (LLMs).

Stanton said there were “a lot more opportunities to come”, and he views the licensing model as a “good revenue stream” in the future.

Nine grew earnings before interest, tax, depreciation and amortisation to $192.2 million for its continuing businesses in the six months to December 31, while its reported net profit, including the sale of digital real-estate listings firm Domain, totalled $896.6 million. Sales from continuing operations dropped 5 per cent to $1.05 billion during that time.

The publishing division that includes this masthead recorded strong subscription revenue growth, up 12 per cent, as subscribers grew to more than 516,000. Registered users reached more than 2 million as Nine’s digital subscriber strategy more than offset declines in print subscriptions.

The division was also aided by a one-off payment of $7.3 million following the outcome of its defamation proceedings brought against The Sydney Morning Herald and The Age by disgraced SAS soldier Ben Roberts-Smith. But the division’s overall revenues, which also includes The Australian Financial Review, fell by 2 per cent to $262.2 million. EBITDA also fell by 1 per cent to $73.7 million.

The company said the results were affected by weak print and digital advertising conditions.

The streaming and broadcast division continued to be hit by poor advertising conditions, with revenue down 6 per cent to $790.9 million. This included a decline of 14 per cent for the Nine Network and its broadcast operations, with revenues for broadcast streaming platform 9Now also down 16 per cent to $100.7 million.

The division was buoyed by the performance of subscription streaming platform Stan, which grew revenue by 15 per cent to $282.7 million, aided by the addition of the English Premier League broadcasting rights. It allowed the platform to raise the price of its Sport tier by $5. Stan now has 2.4 million paying subscribers.

Stanton said the overall results were aided by growth from Stan, the publishing division and a “resilient result” from the total TV assets.

“Our business continues to be defined by strong audience reach and engagement, coupled with disciplined cost management,” Stanton said.

“Over the past six months, there have been material strategic and operational achievements that will cement Nine’s path for the future.”

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.