Seven chief executive Tim Worner has said that some of the Australian commercial broadcaster’s sports-rights acquisitions will deliver a lower-than-expected return on investment.
At the company’s annual general meeting yesterday (Thursday), Worner reflected on Seven’s “disappointing” financial results that were announced in August, with a full-year net loss of Aus$744.3m (€490/$571m) marking a significant fall from a net profit of $184.3m the previous year.
“Some of our sports contracts, predominantly related to major one-off events, will not deliver the level of financial return that was anticipated at the time of signing these deals,” Worner said.
The company’s chairman, Kerry Stokes, added: "This result reflected our need to recognise that the price we paid a few years ago for major one-off sporting events was greater than the current market value.”
Seven did not elaborate on the identities of these “one-off events.”
Worner added that there would be $105m in cost savings over the next two years, including $25m in savings from “headcount reductions… which will commence in the 2018 financial year.”
In August, Stokes said that the broadcaster would continue to invest in “long-standing associations” with the Olympics, the Australian Open tennis grand slam and the AFL Aussie rules league as “these properties provide strategic relevance and increase our exposure to millions of viewers across free-to-air television and mobile devices.”