MediaWorks narrows loss as Three stabilises

MediaWorks' flagship channel TV3 has this year screened high-rating shows such as Dancing With the Stars.

Broadcaster MediaWorks has trimmed its losses by two-thirds after increasing audience share and stabilising the revenues of its struggling television division.

In accounts for the year to December 2017, MediaWorks reported a bottom line loss of $5.7 million - a significant improvement on the $14.8m loss for the previous year. The result was due to stable revenues of $300m, combined with reduced programming and production costs of $98.7m, down from $104.1m.

The company has had a turbulent decade, first labouring under debts of nearly $800m following a disastrous leveraged buyout by Australia's Ironbridge Capital, and then a disruptive tenure under chief executive Mark Weldon dominated by high-profile staff losses and damaging leaks.

Chief executive Michael Anderson, his approach a contrast to the self-styled disruptor Weldon, said "bold and unique are not really the two words that go with my persona" and he put this year's result down to going back to basics and taking "easy moves settling everything down".

"It's not rocket science," he said of restoring order following Weldon's tenure. "It was an incredibly disruptive time and people lose focus of the overall picture and they lose track of overall goals."

Anderson said the focus for television - largely at flagship channel TV3 who have this year screened high-rating shows such as Dancing With the Stars and Married at First Sight - was concentrated on building out primetime slots in order to maximise the company's targetted audience of 24-54 year olds.

According to a result presentation by Anderson, amongst this audience segment MediaWorks increased it's audience share from 19.1 per cent to 20 per cent over the year.

The launch of The Project last February - a hybrid comedy and current affairs offering licensed from Australia - was a key part of this focus, he said, helping to channel viewers of the preceding six o'clock news bulletin into entertainment programming later in the evening.

"Strategically we're happy with the way it fits. Are we happy with the ratings performance as of now? No. But we see that as an opportunity."

Anderson noted the Australian iteration of The Project took four years to bed-in and expressed confidence results of his own spinoff would improve.

"This was never going to be a fast turnaround."

The accounts also show Oaktree are, three years after taking over, still having to pour cash into the business. The fund manager tipped in $8m in 2017, following $14.5m the year earlier.

The company is also poised for some balance sheet juggling, with a five-year loan facility of $72.9m - backed by a range of burned banks and vulture funds who'd acquired debt on the cheap during earlier MediaWorks struggles - due to expire in November.

Anderson, and the accounts, said discussions to replace the facility were well in-train with a commitment letter in hand for a new $95m, three-and-a-half-year loan from a new lender.

The old facility had proved troublesome with accounts showing repeated breaches of loan covenants - largely over having an insufficient debt to equity ratio - although given owners Oaktree owned a majority of the debt, receivership was never a realistic consequence.

Anderson was hopeful the terms of the new loan would avoid a repeat of these regular breaches.

"Those days, I'm hoping, are well behind us."