Fear, loathing, and rubbery figures – the SBS stoush

James McGrath
By James McGrath | 20 November 2014

Mystery continues to surround just what impact changes to SBS's advertising allowances will have, with wildly varying predictions being floated on both sides of the argument.

Announcing cuts as a result of the Lewis efficiency review yesterday, the Federal Government announced that it would cut the amount it supplies to the broadcaster over a five-year period.

As part of this, it would allow the broadcaster to change the rules on its advertising, pending a legislative amendment.

The Federal Government and SBS floated figures of an extra $28.5 million over five years from advertising, but Free TV Australia, leveraging analysis done by MediaCom, said this figure would more than likely be roughly $200 million.

However, speaking about the cuts yesterday, Communications Minister Malcolm Turnbull said “the most optimistic level of earning would be $20 million per annum.”

But he also said that the figure would, in reality, be much, much lower.

"As you deduce we are, after extensive discussions with SBS, assuming that the additional revenue to the SBS from the advertising changes amounts to $28.5 million over five years," Turnbull said.

The chairman of the group, Harold Mitchell, even went as far as to accuse the Government of massaging the figures to lessen its impact.

“The minister's figures are very rubbery,” he said.

“There is a finite advertising pie and any increase in SBS revenues will come directly from commercial broadcasters who will, in effect, be subsidising a government-funded broadcaster.”

A look at SBS's financial statements indicate that it made $73.4 million in “advertising and sponsorship” in the 2014 financial year, but this also included the effect of the World Cup.

It reported a figure of $58 million in 2013.

Averaging that out at $65.7 million, that means – according to the Free TV floated figure of an extra $200 million –it would essentially have to find an extra 60% of revenue with no change to its overall allowable minutes.

The Government said that while a limit of 120 minutes of advertising per day would remain, should it change the regulation governing SBS, the network would be allowed to show 10 minutes of advertising in any given hour instead of its current limit of five.

The overall limit means that, should SBS elect to increase advertising in one hour, it would have to reduce advertising across other hours to balance it out.

For example, if it allotted the full 10 minutes per hour from 6pm to 10pm, it would have to find 20 minutes elsewhere in the day to reduce advertising.

But, speaking with AdNews this morning, FreeTV Australia said 85-90% of SBS's advertising revenue came from prime time.

Its argument is that reducing advertising outside of primetime would have little to no impact, while SBS could effectively turbo-boost its revenue by doubling its allowable minutes during primetime.

Both SBS and the ABC are expected to appear before senate estimates tonight, while further comment is being sought from SBS and the minister's office.

For more news:

Govt attacked over cuts

SBS to undercut Stan on Fargo

Dateline to get a "refresh"

 

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at jamesmcgrath@yaffa.com.au

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