Nine Entertainment (ASX: NEC, Nine) has signed agreements with Facebook and Google, following the Australian Commonwealth Government’s enacting of the News Media Bargaining Code.
The deal with Facebook is for the supply of news video clips and access to digital news articles on Facebook news products, for a term of up to three years with a minimum amount payable over the term.
The five-year agreement with Google includes the supply of news content (excluding video) for Google’s News Showcase and other news products. Google will also expand its marketing initiatives across Nine’s platforms. The amount payable is a fixed annual fee with modest growth in the early years.
Having regard to the expected net revenue from these Facebook and Google agreements, the impact of the termination of Google’s previous sales agreement on programmatic advertising sales revenue from 1 March 2021, as well as the ongoing growth in subscription revenues for Nine’s key mast-heads, Nine says it expects growth in the Publishing division’s EBITDA in FY22 (over FY21) in the range of AUD$30m to $40m.
In a statement to staff, Nine CEO Mike Sneesby said, “I want to acknowledge the contributions by people across the business who have enabled us to conclude these significant deals. Our Chairman Peter Costello and former CEO Hugh Marks have driven this issue for many years – particularly from a legislative perspective – and have been instrumental in getting us here today. I also want acknowledge our Chief Digital and Publishing Officer, Chris Janz, General Counsel, Rachel Launders, and Director of Communications, Victoria Buchan – and all of their teams – who were key in Nine’s negotiations and legislative efforts on the media code, and who have ensured we have arrived at a deal to recognise the value of the work we produce right across our business.
“There has been discussion about how the revenue from these deals will impact our business and while the precise dollar value of the deals are commercial-in-confidence, they will play a role in evolving Nine to a world where the majority of our revenue is digitally led. These deals will contribute to supporting the world-class journalism on which our business thrives and to give us the opportunity to pursue growth that will continue to underpin the long-term strength of our business.”