The Australian media sector entered 2020 already in a mild state of crisis. With traditional advertising models already smashed by the growth of the digital giants, only the most strategic and well-run players were looking forward to a prosperous year when the smoke of the summer fires started clearing in late January.
Then the COVID-19 pandemic ripped away huge swathes of revenue, forced overnight changes to the way newsrooms and production houses operated, and as the nation plunged into recession every media company made drastic changes to their cost bases and broader business structures. Plans for takeovers and mergers were quickly replaced by capital raisings and restructures for survival.
We take a look back on the toughest year the media industry has faced in decades.
Mergers, takeovers, restructures and closures
All eyes were on Kerry Stokes’ Seven West Media and the Bauer family at the beginning of the year as they waited to see whether the competition regulator would allow the country’s two biggest magazine publishers to merge. After months of uncertainty, the $40 million deal was approved and became the first asset sale under Seven boss James Warburton, who is still hoping to sell transmission tower company TX Australia, which it owns with Nine Entertainment Co, Seven’s studios division and its digital ventures companies such as Airtasker and SocietyOne.
But the sale of Pacific Magazines to Bauer came at a cost to readers. The deal coincided with the pandemic, leading to mass job cuts and the closures of some well-known brands, including NW, OK! Harper’s BAZAAR and Elle.
The closure of the magazines was only the beginning. In May News Corp announced it would stop printing 112 community and regional mastheads, which affected almost 1000 jobs. Some were revived in digital form but the Wentworth Courier, The North Shore Times and the Mosman Daily were among the few to survive the print cut. Antony Catalano’s Australian Community Media followed suit and permanently shut some of its newspapers.
Suspension of major sports competitions prompted several rounds of redundancies at Foxtel while Seven, desperate for cash, cut more than 50 jobs and made its staff take a 20 per cent pay cut, to cope with market conditions. It was an unfortunate year for journalism because the ABC was already anticipating more than 200 job cuts due to an indexation freeze by the federal government. Goodbye to the 7:45am radio news bulletin and ABC Life.
But it was not all doom and gloom for Australian Associated Press, the newswire that was going to be shut down in February after its major shareholders Nine (owner of this masthead) and News Corp decided it was no longer commercially viable. While some jobs were lost, it was rescued by a group of philanthropists and investors led by former Foxtel boss Peter Tonagh – a positive outcome for a sector otherwise decimated by the pandemic.
Mr Tonagh was also involved in another small win for the sector – the sale of embattled theme park and cinema operator Village Roadshow despite dissent from one of the company’s biggest independent shareholders, Mittleman Brothers.
The COVID-19 effect
Most media companies claimed mass redundancies that occurred during the pandemic were not the result of the crisis itself, but an acceleration of what was to come in several years’ time. The industry, which has struggled to operate with a drop-off in advertising revenue in recent years, accelerated cost-cutting to improve liquidity.
Others looked at alternative measures. Southern Cross Austereo, which runs Hit Network and Triple M, oOh! Media and Seven raised capital and negotiated new deals with bank lenders. They also reduced the amount of hours staff were working and in some instances cut pay.
Another way media companies looked to cut costs was by renegotiating sports rights. Nine, Seven and Foxtel struck deals with sports such as the AFL, NRL, rugby union and cricket after the pandemic caused competitions to be delayed. These negotiations will continue in the new year.
But there were also changes to the way the industry works. Television and radio hosts and newspaper executives learnt how to run their programs and mastheads from the confines of their own homes. For the first time, the industry was operating remotely – and successfully.
Executive and talent changes
There were plenty of movers and shakers in 2020 and most were unrelated to the pandemic. Ten boss Paul Anderson resigned in March after nearly 20 years with the network. Months later Nova Entertainment boss Cath O’Connor, who was leading the company that owns Smooth FM and Nova FM, announced her resignation before being revealed at soon-to-be new chief executive of billboard company oOh! Media. oOh! Media’s founder Brendon Cook announced his resignation before the pandemic began.
As the year drew to a close Nine boss Hugh Marks announced his plans to leave the company after more than five years as chief executive, revealing his relationship with the company’s former commercial director, Alexi Baker.
There were also major talent changes. 2GB radio host Alan Jones announced his shock retirement after 35 years at the top of the talk radio ratings, while Network Ten’s well-known television hosts such as Tim Bailey, Kerri-Anne Kennerley and Joe Hildebrand were among those cut as part of changes to the broadcaster’s newsroom.
Other stories that changed the landscape
The battle of the streaming giants failed to disappoint during the year. Competition for eyeballs was already heating up after the launch of Disney in late 2019, but Foxtel’s decision to launch its own entertainment streaming service Binge heightened tensions.
The launch prompted tit-for-tat negotiations for WarnerMedia and HBO content, which ended in a multimillion-dollar deal with Foxtel. Rival Stan, which is owned by Nine, announced its move into live sports streaming after securing the rights to the rugby union and late last week Disney+ announced plans to expand its offering with the 20th Century Fox and FX shows such as Logan, The Kingsman and Family Guy to launch on its platform. ViacomCBS also announced plans to launch Paramount+ in the new year, a move that will eventually mean Foxtel and Stan lose more content.
At one point it looked like Foxtel’s owners Telstra and News Corp had a way out of the debt-ridden pay-TV company, with a US special purpose acquisition company led by cable TV veteran Leo Hindery offering to wipe its debt, but the company said no.
The fight between media outlets and the tech giants Google and Facebook reached its peak. At the height of the pandemic Treasurer Josh Frydenberg announced plans to legally force the two platforms to pay news organisations for use of their content through the creation of a news media bargaining code. The proposed laws were tabled in Parliament earlier this month but already Google boss Melanie Silva has opposed the plans. Facebook announced earlier this year it would remove news content from its platform in response to a draft version, but it is unclear whether they will follow through with the threat.
Tensions between the ABC and the federal government are also at their peak after a difficult year. Excluding a fight over funding which led to a major ABC restructure, Communications Minister Paul Fletcher thrice got himself involved in the national broadcaster’s decision making processes – proposing a move of staff headquarters to the outskirts of Sydney, asking for pay rises to be paused and requesting a “please explain” about a Four Corners episode which investigated the behaviour of politicians Alan Tudge and Attorney-General Christian Porter.
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Source: Thanks smh.com