Why SWM is worth more than $1.50 per share, page-343

I’m taking this opportunity during the Christmas break from the office to put together the puzzle pieces for those who like to figure things out before the market does. This means plenty more writing about the positive developments involving SWM that have been missed . If you want to enjoy your festive season in peace- please set my account to ignore.

My message is simple- if you have the patience to invest and hold SWM shares until September 2025 you will be richly rewarded by this massively mispriced market. SWM shares will deliver multi-bagger returns by September 2025.

The Australian Federal Government has now shown its unequivocal support of the Australian Commercial TV sector by recently announcing a spate of new measures including.

• Introducing the News Media Bargaining Incentive from 1st January 2025 to strengthen the News Media Bargaining Code. https://www.theguardian.com/australia-news/2024/dec/12/meta-tiktok-and-google-to-be-forced-to-pay-for-australian-news This serves two very important outcomes for SWM.
• Firstly Meta is once again forced to negotiate news media content deals with SWM within a legislated framework that has bi-partisan political support (in fact not only do the Coalition, the Greens and Labor support the News Media Bargaining Code but the Labor government even got the greenlight from the new Trump administration before pressing Meta into a corner with this new tax incentive) https://www.mi-3.com.au/13-12-2024/more-platforms-more-publishers-tiktok-microsofts-linkedin-and-bing-likely-pincered-meta
• Secondly this is a massive new financial win for SWM as the News Media Bargaining Incentive applies to all social media and search platforms with over $250m of Australian Revenue not just those that were to be 'designated' under the News Media Bargaining Code. This means that Tiktok now has to negotiate a news media content deal with SWM (and possibly even LinkedIn and Bing depending on their Australian Revenue levels). To have an idea of how much extra revenue a deal with Tiktok will bring in its worth noting that the News deal entered into with Google in 2021 was for an estimated $30m per annum and in the words of SWM required ‘minimal incremental costs … to deliver the revenue’. Whilst the Tiktok deal will undoubtably be smaller than this $30m it will still constitute a substantial boon for shareholders. https://clients3.weblink.com.au/pdf/SWM/02370583.pdfhttps://www.thenewdaily.com.au/finance/consumer/2021/02/15/seven-west-google
• - The Mid-Year Economic and Fiscal Outlook (MYEFO) released yesterday provided a 1-year suspension of the Commercial Broadcasting Tax from June 2025. This tax costs the commercial tv industry approx. $50.3m per annum (Of this approx. $17m is paid by SWM each year when including its 2021 Prime Media regional acquisition). https://7news.com.au/news/federal-government-confirm-one-year-suspension-of-commercial-broadcast-tax-in-2024-25-myefo-c-17130836 https://www.adnews.com.au/news/myefo-285-3-million-for-media-diversity
• Mandating a minimum commitment of $3m per year for two years from June 2025 for regional newspaper advertising across the total Commonwealth Government media spend. The West Australian Regional Papers business is one of Australias largest regional publishers and is set to be supported by this initiative. https://advertising.sevenwestmedia.com.au/print/the-west-australian-regional-newspapers/
• The News Media Relief Program which offers $15m in grants during 2024/2025 to regional media outlets to offset $13,000 of each Full time equivalent journalists salary and thereby support public interest journalism. https://business.gov.au/grants-and-programs/news-media-relief-program
• $116.7m over four years to support and build the sustainability and capacity of news organisations so they can deliver public interest journalism and local news. This funding reminds me of the Public Interest News Gathering (PING) grants that were rolled out by the Morrison Government during the Covid-19 lows and which marked the turning point in the ad market. https://www.paulfletcher.com.au/media-releases/media-relase-immediate-covid-19-relief-for-australian-media-as-harmonisation-reform- https://thenightly.com.au/politics/australia/federal-government-local-media-bolstered-by-180-million-fund-to-support-news-organisations--c-17092708