Nine Entertainment and Southern Cross Austereo have today announced the signing of a new regional television affiliation agreement.
The five year agreement will see SCA broadcast Nine’s metropolitan free-to-air television content into regional Queensland, Southern NSW and regional Victoria from 1 July 2016.
The change brings to an end the 27 year affiliation agreement between Nine and WIN TV.
Under this new agreement, SCA will pay Nine an affiliation fee of 50 per cent of its television revenue. Nine had sought a similar revenue agreement with WIN over the past 12 months of negotiations however WIN, which currently pays approximately 39 per cent of its revenue to Nine was unwilling to give up such a large percentage of its earnings.
WIN TV has been operating on a 6 month extension of its previous affiliate agreement with Nine. It will now be forced to negotiate a deal with the Ten Network to secure a new source of programming.
WIN TV is owned by billionaire businessman Bruce Gordon. Gordon recently obtained a 14.99 per cent share of Nine and a 14.99 per cent share of the Ten Network in a move designed to protect his regional business.
The SCA channels will carry Nine’s branding and broadcast its Australian and international content including The Voice and The Block, as well as all NRL and Cricket broadcasts, providing a seamless Nine brand across metropolitan and regional markets.
Interestingly the 1st of July falls on a Friday meaning regional viewers may have to do a quick retune of their TV equipment in order to enjoy that nights live NRL coverage.
As WIN TV has a bigger broadcasting footprint over regional Australia than Southern Cross Austereo, Nine will have to negotiate further agreements with regional broadcasters in areas outside SCA zones to ensure those regional viewers don't miss out on Nine programming. The new deal also raises questions regarding which regional broadcaster will continue to broadcast Ten Network content in Northern NSW.
As part of the new affiliation deal, Nine and SCA have agreed to work together on a number of opportunities to mutually grow their businesses. This will likely include cross-promotion of Nine programming on SCA's extensive radio networks including the Hit Network, Triple M and over 60 regional stations.
It also increases the likelihood the two companies will eventually merge should media ownership laws change. It had been expected media laws would be relaxed this year allowing for a number of mergers and acquisitions, however potential changes to legislation have been delayed due to the early election.
Hugh Marks, CEO of NEC said “This is a great outcome for Nine and SCA. We are confident that, together, we will offer a premium viewing experience for audiences and a best in class platform for advertisers.”
The agreement provides for an expansion of news services broadcast by SCA. Nine’s News bulletins will be broadcast to regional markets across Queensland, Southern NSW and Victoria.
As part of the arrangements, SCA will provide national sales services for Nine’s NBN channel in Northern NSW and NTD9 in Darwin.
Welcoming the agreement, Grant Blackley CEO of SCA said “I’m excited SCA is entering into this landmark long term agreement with Nine, a media company which has so successfully informed and entertained Australian audiences for many decades.”