Nine Entertainment Company (ASX:NEC) - CEO, Hugh Marks
CEO, Hugh Marks
Source: bandt.com.au
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Nine Entertainment (NEC), the corporate body behind Channel Nine, has agreed to a new contract with the NRL
  • The new contract covers the code’s 2020, 2021 and 2022 seasons
  • This year, a much shorter 20-round season will be played, with a grand final pencilled in for October 25
  • Following this, Nine will broadcast a rugby season finals and State of Origin series
  • The revised contract will result in a net benefit on Nine’s profit and loss sheet, owing to changes in rights fees as well as associated production and services arrangements
  • Further, the net improvement on the agreement is expected to hit $27.5 million each year, realised over FY21 and FY22
  • NEC shares are 0.34 per cent in the red today, trading for $1.48 per share at 2:20 pm AEST

Nine Entertainment (NEC), the corporate body behind Channel Nine, has agreed to a new contract with the NRL.

The new contract covers the code’s 2020, 2021 and 2022 seasons. This year, a much shorter 20-round season will be played, with a grand final pencilled in for October 25. Following this, Nine will broadcast a rugby season finals and State of Origin series.

The 2020 NRL season began in earnest last night, with the Brisbane Broncos playing the Parramatta Eels at Brisbane’s Suncorp stadium. 

It was the first Australian professional sporting code to come back after the 10-week coronavirus hiatus. Despite being played in front of no crowds, the game was widely hailed a success and a return to normality.

The revised contract will result in a net benefit on Nine’s profit and loss sheet, owing to changes in rights fees and associated production and services arrangements.

The net improvement on the agreement is expected to hit $27.5 million each year, realised over FY21 and FY22.

The company did not mention what the improvement would be over this financial year, but said it would have “a greater benefit” on its profit and loss this financial year, owing to the modified season.

The CEO of Nine Entertainment, Hugh Marks, said the return of the NRL was “an excellent long-term outcome” for both Nine and the game of Rugby League.

“Completion of season 2020 will enable the continuity of the code from a game, supporter’s and sponsor’s perspective,” Hugh commented.

“We are also delighted to have reached a revised agreement with the NRL for season 2021 and 2022, and at a level of rights costs that enables us to sustainably invest in Rugby League for the future,” he continued.

Subsequent to the return of the NRL to the airwaves, Nine has revised its previous cost commentary. On March 30 of this year, Nine announced an ambitious cost-cutting program that would save some $266 million.

Then, on May 5, that number increased to $289 million.

Those estimates included a $130 million savings as a result of the cancellation of the 2020 NRL season, which is obviously no longer in effect.

The company’s new cash guidance is a saving of $225 million.

“Nine is pleased to be continuing its partnership with Rugby League” Hugh commented. 

NEC shares are 0.34 per cent in the red today, trading for $1.48 per share at 2:20 pm AEST.

NEC by the numbers
More From The Market Herald
The Market Herald Video

" Sky Network Television (ASX:SKT) confirms rumours of potential MediaWorks acquisition

Sky Network Television (ASX:SKT) has confirmed media rumours of its potential acquisition of MediaWorks.
Nine Entertainment (ASX:NEC) - CEO, Hugh Marks

" Nine Entertainment (ASX:NEC) scraps profit guidance for 2020

Australian media giant Nine Entertainment (ASX:NEC) is the latest company to throw its profit guidance out…
Nine Entertainment (ASX:NEC) - Chief Financial Officer, Paul Koppelman

" Nine Entertainment (ASX:NEC) CFO Paul Koppelman resigns before FY20 results

Nine Entertainment (ASX:NEC) Chief Financial Officer, Paul Koppelman, has resigned just before the company releases its…
Nine Entertainment (ASX:NEC) - CEO, Mike Sneesby

" Nine Entertainment (ASX:NEC) extends NRL broadcast rights

Nine Entertainment (ASX:NEC) has executed an agreement regarding the broadcast rights for the National Rugby League…