Seven West Media (SWM) has finalised longform agreements with Google and Facebook over payments for its news content.
The deal with Google is for five years and its agreement with Facebook, which the social media company still needs to sign, is for three years.
The media company hasn’t revealed the value of the deals.
“Completion of the two agreements confirms the strong recognition of the quality and credibility of our leading television and newspaper news brands and entertainment content,” says Seven West Media CEO James Warburton.
“Together, they underpin our sustainability and enable us to continue to build our digital platform.”
The deals come after the news media bargaining code was passed earlier this year, requiring the digital platforms to pay certain media outlets for their content.
SWM expects the digital revenue associated with the agreements to begin before the end of the second half of the financial year, with the majority to be derived in the 2022 financial year. SWM says minimal incremental costs are required to deliver the revenue.
SWM has also given an update on trading, with its Q3 FY21 advertising revenue growing at the upper end of the 7-10% range provided at the first-half results briefing in February.
Net debt is forecast to be $270 million to $280 million by the end of the 2021 financial year. Net proceeds of $45 million from the Airtasker IPO in March were used to retire debt, bringing total debt retirement to $195 million in the second half to date.
“The transformation of SWM continues. Finalisation of the Google and Facebook agreements completes one of the key objectives outlined in our February results, delivering further digital transformation, and realising the true value of our news and current affairs product on third-party digital platforms,” Warburton says.
“Our balance sheet is now in a much stronger position and our FY21 Q4 content is positioned to deliver audience and share growth, particularly among people 25 to 54 and on 7plus.”
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