SYDNEY — Kerry Stokes’ Seven Network swam against the tide of a weak ad market to post a 29% jump in net profit to A$108 million ($82 million) for the year, on the back of strong ratings.
Seven’s earnings rose 9% to $980 million from the previous year thanks to a string of hits including “Border Security” and “Dancing With the Stars” that have seen the web mount a serious challenge to ratings leader Nine Network for the first time in two decades.
Web also benefited from its output deal with ABC/Disney, which has delivered it “Lost”, “Desperate Housewives” and “Grey’s Anatomy.”
Seven delivered advertising revenue growth up 9.6% to $748 million in a market that declined 1.5% during the same period. Seven took 36.4% of the Aussie ad market up from 31.4% in the previous year.
The company also addressed concerns over a year long court case in which Seven is suing a group of media orgs — including Rupert Murdoch’s News Ltd. and Nine Network-owner Publishing and Broadcasting — for $818 million for allegedly colluding to put Seven’s fledgling sports channel C7 out of business. Seven is demanding $837 million in damages.
“Final court hearings in the C7 legal case are expected to commence in the federal court next month,” Seven said in a statement. Web has no judgment day but expects legal costs associated with this case will be “materially lower in the new financial year.”
But Seven warned that costs may grow around 10% next year with the acquisition of TV rights for the Australian Football League and V8 Supercars. Seven and Network Ten won the rights to the AFL at the record price of $595 million earlier in the year.