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The Big Deal: Free-to-air TV swings the axe, but will it be enough as enormous sports deal bills loom?

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05 July 2024 13:07 (AEDT)

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Former AFL star Warren Tredrea discusses all this and more with Unmade media analyst Tim Burrowes in this interview on The Big Deal.

Warren Tredrea was captain of Port Adelaide and then became the nightly sports reader on Channel 9 in Adelaide. He knows how commercial television works.

Jobs being axed as big bills to pay

In recent days both Channel 7 and Channel 9 announced they’ll be slashing hundreds of jobs, after Meta refused to renew news content deals covering Facebook and Instagram.

The problem is, these companies already had huge bills to pay to cover sporting rights deals:

Unmade’s Tim Burrowes tells Warren Tredrea that covid inflated audience numbers, but that was short-term. The numbers have been dwindling as audiences move to consume streaming services. With this trend, he predicts larger global platforms are likely to be the front runners for future big dollar sports coverage deals.

Revenue falls not cyclical, but structural

He said the TV world was going through an adjustment, not unlike the publishing industry did in 2012.

“It’s tough for all the TV services. What we have effectively been seeing – and we have been seeing it for more than a year now – is the amount of advertising dollars coming in has often been down more than 10 per cent month-on-month,” Mr Burrowes said.

“That would be bad as a one-off, but when it goes on and on and on, then you really start to recognise this isn’t just the advertising cycle, and it will be back.”

He discusses how the most recent moves by Channel 7 signal a realisation that the trend is likely structural, rather than cyclical, and the advertising dollars won’t be returning.

He argued the Meta move wasn’t sudden, it was ‘entirely predictable’ with plenty of warning.

Warren Tredrea and Tim Burrowes talk about the sell down of media stocks and question where investor opportunities might lie.

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