Seven West’s debt is set to look healthier following the completion of media bargaining code agreements with Google and Facebook.
The company – which owns West Australian Newspapers as well as the Seven Network – told the stock exchange this morning that it had finalised the partnership with Google it announced in February, and signed a long-form agreement with Facebook which awaits signature overnight.
SWM said the agreement with Google was for five years and that with Facebook for three years.
Managing director and chief executive James Warburton said completion of the two agreements “confirms the strong recognition of the quality and credibility of our leading television and newspaper news brands and entertainment content.
“Together, they underpin our sustainability and enable us to continue to build our digital platform.”
Warburton was at pains to acknowledge the government’s contribution, adding that the partnerships “have been made possible by the introduction of the Media Bargaining Code.
“This has been an important reform led by prime minister Scott Morrison, the chair of the Australian Competition and Consumer Commission Rod Sims, treasurer Josh Frydenberg and communications minister Paul Fletcher.”
Revenue from the agreements will start to flow before the end of the financial year, although the majority will come next year. Warburton said “minimal” incremental costs were required to deliver the revenue.
He said Seven’s third-quarter advertising revenue grew “at the upper end of the seven-to-ten per cent range” provided at the first-half results briefing in February. Net debt is forecast to be approximately $270-$280 million by the end of FY21. Net proceeds of $45 million from the Airtasker IPO in March have been used to retire debt, bringing total debt retirement to $195 million in the second half to date.
“The transformation of SWM continues,” he said. “Finalisation of the Google and Facebook agreements completes one of the key objectives outlined in our February results, delivering further digital transformation and realising the true value of our news and current affairs product on third-party digital platforms.
“Our balance sheet is now in a much stronger position and our FY21 Q4 content is positioned to deliver audience and share growth, particularly among people 25 to 54 and on 7plus.”