MEDIA REPORTS, page-1361

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Seven West Media nears deal on debt covenants

Seven West Media is believed to be almost out of the woods for now with its financiers, with suggestions that the free-to-air broadcaster is close to announcing a deal to waive its debt covenants.

It comes as the group has moved swiftly to sell down assets and cut costs, which is understood to have pleased the lenders.

The media group is not thought to be taking on any additional debt.

Seven West, which is backed by billionaire Kerry Stokes, this year hired advisory firm Grant Samuel to assist with its situation after it was hit with a collapse in advertising related to COVID-19 restrictions while shouldering a $541m debt pile.

However, the business has secured $75m for its Perth-based property site at Osbourne Park which houses its newspapers, The West Australian and The Sunday Times, and $40m for a sale of Pacific Magazines to rival publisher Bauer.

Its Redwave Radio operation has also been offloaded.

It is understood that US-based private equity firm Oaktree Capital Management made an approach to buy the business, but was rebuffed by Seven West.

Oaktree was one of the private equity firms that recapitalised Seven’s rival Nine Entertainment when it was on the brink of collapse and also made efforts to buy the Ten Network when it went into administration.

Ten was later sold to US-based television network CBS.

Seven West, which currently has a market value of about $161m, has been a strong performer from a ratings perspective, winning market share with the AFL and shows such as Big Brother in the 25- to 54-year-old age bracket and performing strongly in broadcast and video on demand, with its market share at close to 50 per cent.

Five years ago, Seven West’s market value was $2.2bn, but like all television broadcasters it has fallen after suffering from digital disruption from streaming services such as Netflix.

Compounding matters is the fact that Australian free-to-air broadcasters have been among the media companies hardest hit by a lack of advertising during the COVID-19 pandemic, although conditions are now improving.

Data from the Standard Media Index revealed overall metro television advertising spending fell 40.3 per cent year on year in May, an acceleration from the 29.1 per cent in April and worse than its predicted 35 per cent decline for the April to June period.

Seven West owns West Australian Newspaper Holdings, as well as its free-to-air television Seven Network and about 20 regional newspaper titles.

Talks are also said to have taken place between Seven West and media entrepreneur Antony Catalano for a sale its newspaper division, but no deal ever eventuated.