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Sports suspension hits Nent’s Viaplay Q2 revenues

Sales revenues for the Nordic Entertainment (Nent) Group’s Viaplay streaming service are slightly down, as a result of the reduction in pricing for its sports packages due to Covid-19.

The pan-Nordic broadcaster has announced that despite paying subscribers for Viaplay being up by 206,000 quarter-on-quarter, and 605,000 year-on-year, that sales revenue has decreased by 4 per cent.

Nent’s total net sales in the second quarter of 2020 were SEK2.62bn ($297m/€257m), a decrease in organic growth of 13.2 per cent.

Other subscription revenues fell by 34 per cent due to the deconsolidation of Viasat Consumer, the satellite pay-television arm, and the temporary sports package price reductions by third-party distributors. Second-quarter advertising sales dropped by 30 per cent but Nent said that there was substantial improvement in July.

In mid-March, Nent responded to the suspension of sport due to Covid-19 by cutting the price of its sports packages and halting sports-rights payments. When many sports leagues and competitions resumed in June, the broadcaster reintroduced full pricing for its sports channels in Denmark, Finland and Sweden and resumed sports-rights payments.

Nent has since increased its Viaplay subscriber targets for the year following on from a surge in interest due to the resumption of sporting events suspended due to the Covid-19 pandemic. The broadcaster saw a 10-per-cent increase in streamed minutes in June this year compared to 2019, and an 116 per cent increase so far in July.

Viaplay launched in Iceland in April this year. and will be launching in Estonia, Latvia and Lithuania in the first quarter of 2021.

Anders Jensen, president and chief executive officer at Nent has said that “our vision is now to scale Viaplay even further, with the addition of 15-plus markets in the next 5-plus years”.

Speaking upon the presentation of first-quarter financial results in April, Nent reiterated its tough stance on sports-rights fees, saying that it would also expect to be refunded for events that end up being cancelled. It announced on the same day that it had been refunded 100 per cent of its rights fee for ice hockey’s cancelled 2020 IIHF World Championship.

At the time, Jensen said: “We are contractually entitled to on a pro-rate basis get back [rights costs for] any non-concluded sports events, whether that is the Premier League or Champions League or anything else. We will of course not get money back for the matches already played but we will get money back if something is cancelled.”

Nent said then that it expected to reduce its sports cost spend by around SEK200m this year compared to the initial plan.

Delivering an update, Jensen said today: “We have taken the remaining costs for the current football seasons that have restarted, while costs for other sports events that had not restarted in Q2 will be taken from Q3. The savings from the 2019 transformation and 2020 Covid-19 initiatives amounted to SEK300m in the quarter, and we continue to expect savings of over SEK900m for the full year.”