Nine to face budget cuts
By Brad Norington and Lara Sinclair
18dec06
JAMES Packer's media empire has confirmed it will focus on managing costs to cope with a decline in advertising revenue, amid speculation of a further round of multi-million-dollar budget cuts.
The confirmation came as PBL Media executives were believed to be in discussions with new private equity investor CVC Asia Pacific about future spending across the Nine Network and at The Bulletin magazine.
A PBL Media spokesman said the $5 billion transaction to sell half of the television and magazine group to CVC was not yet complete, and the foreign private investor could not be involved in decision-making until the Howard Government's media laws took effect next year.
But industry sources, including prominent media buyer Harold Mitchell, said a new "short-term financial focus" had already taken hold at the network, ahead of the changes to media laws, because of a quest for bigger profits.
The Nine Network is still fending off claims that chief executive Eddie McGuire could vacate his position early next year and return to an on-air role, following reports he has been kept out of key management decisions by PBL Media chief executive Ian Law.
After turmoil at Nine earlier this year over $15 million in budget cuts at its news and current affairs division, reports have also emerged that host of the top-rating NRL Footy Show Paul "Fatty" Vautin will take a pay cut of almost $300,000.
Footy Show co-host Peter Sterling will no longer appear on the program.
Nine is hosing down claims that Tracy Grimshaw, host of A Current Affair, could be poached by Seven to host its Today Tonight program, and that its news and current affairs chief, Garry Linnell, is unhappy over his cost-cutting role. Further speculation hangs over the future of flagship publication The Bulletin, with suggestions it could be changed from a weekly to a monthly after considerable losses.
PBL Media confirmed yesterday that its emphasis was increasingly on profits, and the company was prepared to rationalise "where possible".
A PBL Media spokesman said Mr McGuire was working closely with Mr Law, but the network could not comment about its program talent.
The company is believed to be annoyed it is attracting scrutiny over changes while rival Seven escapes flak over uncertainty about Sydney newsreader Ian Ross, the sacking of Today Tonight host Naomi Robson and the future of stand-in host Anna Coren.
Vautin yesterday declined to comment, but his manager John Gibbs said he expected a good outcome. Sterling, who recently signed a new three-year contract, said he had asked for a new career direction at Nine.
Linnell said he was "having a ball" as news chief and described it as the best job of his life.
Dismissing claims that Grimshaw could leave Nine, he said she was in contract negotiations and would definitely return next year after "clawing back" ratings for A Current Affair.
Media buyer Mr Mitchell said Nine was destined to have a more short-term financial focus.
"It's happening already," he said. "The last time this happened, in the 80s, every company just changed the character of what it was. I can see it (at Nine). Kerry Packer was famous for saying, 'We'll keep investing and we'll get it right'. It will never be the same again. It doesn't help that the absolute boom days of television are over."
Mr Mitchell said while Nine had won the ratings year, advertising momentum continued to be with Seven, which was likely to edge ahead of Nine in revenue for the 12 months to December.
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