Publisher and broadcaster Nine Entertainment is looking at an increase in profits of $30-40 million after concluding content deals with Google and Facebook.
The boost in earnings of its publishing division – which includes the Sydney Morning Herald, The Age and the Australian Financial Review – takes into account the impact of terminating its previous sales agreement with Google on programmatic advertising from the beginning of March, as well as ongoing growth in subscription revenue.
It follows enactment of the federal government’s news media bargaining code legislation.
Nine told the stock exchange today that its deal with Facebook covered the supply of news video clips and access to digital news articles on its news products for “up to three years” with a minimum amount payable over the term.
The five-year agreement with Google excludes video, but covers news content (for Google’s News Showcase and other news products).
The company says Google will also expand its marketing initiatives across Nine’s platforms. A fixed annual fee will have “modest growth” in the early years.
In a presentation last month, chief executive Mike Sneesby told investors that Nine was on track to deliver 60 per cent of its EBITDA from digital businesses by 2024, with more than 35 per cent of group revenues coming from subscription. Structural cost savings would account about $230 million.
More than half its revenue now comes from “growth segments”, Sneesby said.