Nine Entertainment Co. Holdings Limited (NEC.AX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the 2025 Annual General Meeting of Nine Entertainment. I'm your Chair, Catherine West. I'd like to start today by acknowledging the traditional custodians of country throughout Australia, and pay my respects to their elders past, present and emerging. Today's meeting is being held on the land of the Cammeraygal people of the Eora Nation. As we announced in September, I will be stepping down as Chair and as a Director of Nine from the end of today's meeting. The Board has endorsed Peter Tonagh to take on the role of Chair, and I know I'm leaving the company in very capable hands, and I'll talk more to that a bit later on in my remarks. Our AGM is being held as a hybrid meeting. We have some shareholders here with us in person and others participating virtually. Shareholders will be able to watch the meeting in real time, submit questions and vote on the resolutions online at the meeting today. If we encounter any significant technical problems during the meeting, we may adjourn the meeting until 3:00 p.m. to ensure all shareholders have the opportunity to participate. We will notify the ASX if that happens. Before opening the meeting formally, I refer you to the disclaimer here on the screen and available through our ASX lodgment. It is now shortly after 10:00 a.m., and I'm advised that this is a properly constituted meeting. As a quorum of at least 2 shareholders for a general meeting is present in person or by proxy. I therefore declare open the 2025 Annual General Meeting. I propose to take the notice of meeting as read. The Notice of Meeting and a virtual meeting guide were provided to shareholders in advance of this meeting. They're also available on the company website and on the ASX announcements platform. Before we start, I'll just run through some mechanics for the meeting. For the people participating online, at the top of the screen, you will see the meeting presenter and the presentation lines slides. At the bottom of the screen, there are 3 boxes. These allow you to get a voting card and ask a question and download documents.

More volume, please. I can't hear you.

Okay. And notify -- and documents such as the notice of meeting. If you experience any difficulties, the online platform, a helpline number is displayed at the top of the page. For people in the room, you should have received a card from MUFG Market Services staff. All shareholders, all proxy holders and authorized corporate representatives in the room who are entitled to vote and ask questions have been issued with a yellow voting card. If there is anyone in the room who is entitled to vote and does not have a yellow voting card, would you please see one of the MUFG Market Services staff at the registration table. Nonvoting shareholders should have a blue card. If you hold a blue card, you may ask a question or make comments. Theaters with a red card and media with green cards are reminded that while you are here to attend the meeting, this is a shareholder meeting, and you're not permitted to make comments or ask questions. Online participants can type questions into the online platform. To do this, click Ask a Question and follow the prompts. We encourage participants to submit questions now. The Company Secretary, Rachel Launders, will read out questions relevant to the business of the meeting at the appropriate time. We may aggregate questions if we receive multiple questions on the same topic. All voting will be by poll, and I declare the poll open now, so you can lodge your vote at any time during the meeting. If you did not cast your vote prior to the meeting, you may cast a live vote at any time now using the online platform for people or for people in the room by completing your voting card and giving it to MUFG, the returning officer for the meeting. MUFG will collect voting cards in the room after discussions on all agenda items. Voting on the online platform will close 5 minutes after the close of the meeting. So getting on with the subject of the meeting, I'd like to introduce you to the people who are here with me this morning. We have, at the end, Peter Tonagh, Non-Executive Director, a member of the Committee and Culture Committee, and as you know, our Chair-elect. Next to him, we have Miyuki Rosen, Independent Non-Executive Director and a member of the Audit and Risk Committee and the Nominations Committee. Mandy Pattinson is next to her, she's an Independent Non-Executive Director, Chair of the People and Culture Committee and a member of the Nominations Committee. Andrew Lancaster is next. He is a Non-Executive Director and a member of the Nominations Committee. Matt Stanton, as you know, is our Chief Executive Officer, and he will address the meeting a little later. Next to him is Rachel Launders, our General Counsel and Company Secretary. Unfortunately, Timothy Longstaff, Non-Executive Director and Chair of the Audit and Risk Committee, is ill and is not able to attend the meeting in person today. He'll be participating virtually, and we have a very lovely photo of him over here, so you can see him. And a number of our company executives are also present in the audience. From the company's auditors, we have Ernst & Young, and we have partner, Megan Wilson, who is available to answer questions regarding the audit at the appropriate time. So I just wanted to start my remarks today by thanking all of you, our shareholders. Investing in Nine is an investment in Australia. I firmly believe a shareholder -- being a shareholder in Nine is actually supporting the future of our country. At Nine, we are part of Australia's social fabric. We shape culture, inform and entertain our communities and bring Australians together through the big occasions and the everyday moments. Nine's local content, reliable news, engaging stories and exceptional sports coverage binds communities and helps shape our national identity. As Australia's largest locally owned media company, Nine has a critical role in maintaining the future of our thriving democracy and culture. But we could not do it without the support of you, our shareholders. So from everyone at Nine, thank you. Today, I'm pleased to report that Nine has emerged stronger from the FY '25 financial year. Despite a very tough economic environment, core operations performed well and our content performance was a standout, underpinning the growth in our audiences. We accelerated our company-wide strategic and cultural transformation and harnessed the power of Nine to drive growth. Our strategy is clear, deepening connections with consumers and advertisers to drive profitable growth and shareholder value. We are attracting dedicated audiences and committed subscribers and encouraging them to remain in our ecosystem for longer. The strength of our content is evident in the numbers. Married at First Sight audience is up 17%. Nine News increased 7%. AFR digital subscriptions grew by 12% and Stan increased its paying subscribers to 2.5 million and reported growth in hours watched. A very significant decision this year was our decision to support the bid by CoStar Group for Domain, resulting in the sale of our 60% stake in Domain. This was a difficult decision, but ultimately, the price offered reflected Domain's potential value to Nine in the foreseeable future. The divestment crystallized significant value for you, our shareholders, enables us to focus capital and energy on media assets where Nine has clear competitive advantages. Of the after-tax proceeds of $1.4 billion, we returned more than half to shareholders via a fully franked dividend of $0.49 a share and also paid down debt. I'm also pleased to be able to report that since we were all here 1-year ago at our AGM, Nine has generated significant value for you, our shareholders, with a total net shareholder return for the period of more than 55%. I congratulate everyone who works at Nine for this incredible achievement, and we look forward to more success for our shareholders. Turning to the wider environment. A healthy and competitive media sector is vital for Australia. Trusted and independent journalism is essential for maintaining a well-functioning democracy. Nine remains very conscious of its responsibilities and takes great pride in our trusted news and investigative journalism. However, our industry is facing increasing pressures from predominantly U.S.-centric international tech platforms that have demonstrated little regard for accurate information or Australian culture and democracy. Fact checking and content protections this year have been completely abandoned. Tech giants have become flagrant in their illegal scraping of all our journalism and cases of dangerously inaccurate information from AI models are increasing. Sadly, we have firsthand experience of this. Just last month, one of our journalists was named by one of the global platforms as a murderer. He was an innocent employee, and he was a choose of a heinous crime. This clearly exposed the unreliability of AI as a source of trusted content. Prime Minister Albanese has made it clear that the intellectual property of Australian media companies is not to be plunded without appropriate recompense. He is committed to implementing the news bargaining incentive and Attorney General, Michelle Rowland, has rejected creating an exception to copyright for AI models. We applaud these positions. We also welcome the suspension of the commercial broadcasting tax and encourage the government to permanently revoke it. The regulatory landscape must level the playing field to support a vibrant local media sector, and we encourage the government to achieve this through a strong regulatory response and a commitment to properly resourcing Australian regulators to tackle the excesses of big tech where appropriate. We back the government's efforts to protect our community, in particular, our young people and urge the government to do more. Any entity making content available in Australia, including social media or AI models, should be subject to local laws, including content quality, civil and criminal law. They should also be mandated to have a viable legal presence that could be held responsible for compliance with Australian law. It is simply the right thing to do. And as Australians, we deserve nothing less. Turning to leadership. In March, the Board appointed Matt Stanton as Chief Executive Officer and Managing Director. Following a very thorough and competitive international recruitment process, Matt stood out as the best credentialed leader for our strategic and cultural transformation. His strategic acumen, transformation experience, strong values and collaborative leadership made him the clear choice to lead Nine. During the year, Tim Longstaff and Peter Tonagh joined us as independent directors, bringing investment banking, government, media and digital expertise. I'd also like to acknowledge Sam Lewis, who retired in May after 8 years of outstanding contribution, including her leadership of the Audit and Risk Management Committee. Last year, when I stood before you, I addressed the cultural issues leading to the intersection report. We have responded with a cultural action plan, adopting all 22 recommendations plus additional initiatives. With our people's courage and determination, we've made significant progress. The business remains on track to complete all of the actions in the cultural action plan. Also last year, many of our shareholders voted against the remuneration report, marking our first strike. Over the last year, we have dedicated significant time to engaging with proxy advisers and shareholders. With this year's incremental disclosure around incentive components has been recognized with a strong majority of shareholders supporting the FY remuneration outcomes. We recognize we do have more work to do to build understanding in some areas. And so we remain committed to continuing our engagement in the year ahead to enhance understanding and alignment in our approach to executive remuneration. Finally, turning to myself. Having served on the Nine Board since 2016 and most recently as Chair and Deputy Chair, in September this year, I decided that it was the right time for an orderly chair succession. During my tenure, I've had the opportunity to use my decades of experience in the international media space to assist in the transformation of Nine into Australia's most diverse media company. Through the merger with Fairfax and bringing Stan to 100% ownership, Nine now stands as the main commercial producer of news content and the largest commissioner of Australian content. With the support of our very experienced Board, I'm proud to have led Nine through the challenges of the last 18 months. And I'd like to thank all the directors for their counsel and support and Matt for his energy, leadership and vision. The real power of Nine is our people. It has been an absolute privilege to have worked with you all for a decade. You really are the best of the best, working with passion and purpose. Your commitment, professionalism, focus on trusted journalism, innovation and creativity combined to make Nine an exceptional company. So from all of us on the Board, thank you all. As we announced in September, Peter Tonagh will assume the role of Chair following the conclusion of today's meeting. Peter has extensive leadership across the media and technology sectors in Australia and is ideally placed to work with the whole Nine team to continue Nine's momentum. Nine entered FY '26 in an enviable position with a clear strategy, a refreshed executive team, a reset operating model, a focus on cultural change, a strengthened balance sheet and a set of diversified integrated assets, Nine is positioned for growth, long-term leadership of the media sector and the creation of more shareholder value. Thank you. I now invite Matt Stanton to say a few words.

Good morning, and thank you, Catherine, for those words. I'm pleased to report significant momentum in Nine's strategic and cultural transformation during FY '25. Let's just check the gentlemen. Can everybody hear me when I'm talking here as well. I just want to make sure -- yes, cool. We have restructured the business into 3 core pillars: streaming and broadcast, publishing and marketplaces. Linked to these changes was a significant refresh of the executive team directly aligned to our strategic priorities, which increased the depth of talent in Nine's leadership. Ultimately, we are focused on sustainable growth underpinned by continuing investments in additional video and publishing markets, a streaming-first approach and a sharper focus on commercialization. At the start of calendar 2025, we introduced an organization-wide program to drive operating effectiveness, and the program is known as Nine 2028, encompassing both strategic and cultural transformation objectives with a focus on both cost efficiencies and revenue opportunities as we position ourselves for growth. We are already starting to see early signs of the success of this program. Over the next 3 years, the changes will reset the Nine business to put consumers at the center of what we do, unlock the power of the Nine Group to drive value across all our holdings and simplify the way we work. Behind the scenes, we are making better use of data, investing in products and utilizing AI tools to create even more compelling experiences for our audiences and consumers across our group. As we mentioned at the AGM last year, we had an amazing profitable Olympics early in FY '25. This reached 19.5 million Australians at scale and won 90 IOC Golden Rings for the world's best coverage, showcasing the power of the Nine Group. And we're really looking forward to the winter games in Milano Cortina in February next year. Our digital strategy encompasses growth across both our core businesses of publishing along with streaming and broadcasting. Standard Nine continued to command more TV screen viewing than any of the international streamers and free video channels. With this backdrop, the digital video market offers opportunities for Nine. While in FY '25, the subdued broadcasting television advertising market impacted our total television performance, there were some positive signs across the year for the future of total television, specifically increased viewer numbers for both broadcast and 9Now in both total people as well as the younger demographics, underpinned by loyal audiences in sport, news and entertainment. And we believe there are clear efficiencies to be gained through windowing and commissioning of our premium content and opportunities to strengthen our offering to content creators and sporting bodies. We also see significant opportunities to grow subscription revenues at Stan and Publishing, driven by both ARPU and underlying subscriber numbers. Over the past 3 years, our metro mastheads businesses has recorded double-digit growth in digital subscription revenues, a testament to our content strategy, while we have marginally reduced our costs. In FY '25, our EBITDA margin of 33% is as good as any major publisher worldwide. And while we take immense pride in this performance, we view it as a platform from where we can grow -- continue to grow. Catherine mentioned the sale of our 60% stake in Domain. We believe this decision was in the best interest of our shareholders, you, and the sale enabled us to return significant capital to our shareholders on a tax-effective basis and importantly, help strengthen our balance sheet. We believe that we remain the natural media partner for marketplace content and are actively exploring opportunities in this space. With a strong balance sheet, our primary focus is investing organically in our business with a view to accelerating our capability to generate value for consumers and advertisers through our digital assets by using our content and data. We also continue to review our portfolio of assets, reflecting the optimal use of capital. From a strategic perspective, each component of our portfolio must offer Nine scale, diversity of earnings and the ability for us to use our core competencies to grow the business. We continue to assess opportunities for incremental capital management, based on our perception of excess capital, reflecting on the market valuation for Nine, balanced with other opportunities. So touching now on our results for FY '25. Nine reported group EBITDA of $486 million on revenue of $2.7 billion. We were particularly pleased with our second half, where we returned to EBITDA growth with record revenue and profit from Stan and a Publishing result that made up for the absence of Meta revenues with strong growth in digital subscription revenues and tight cost controls, 19% growth in 9Now revenues and a 7% growth in EBITDA at Domain. We recorded further growth in wholly owned digital revenues underpinned by 9Now, Stan and Digital Publishing -- sorry, subscription revenues grew by 10% for the year, underpinned by growth at both Stan and in Digital Subscription revenues within Publishing. We have now reached a point in Publishing, where Digital Subscription revenue growth is exceeding the print decline, a significant inflection point for the business. We removed more than $80 million of costs from the business across the year, of which approximately $60 million was classified as ongoing, ahead of the initial guidance of $50 million. This strong performance on costs reflects the impact of our Nine 2028 program, whilst continuing to invest in the areas of growth. Nine has lodged a trading update with the ASX earlier this morning. Following on from growth in H2 FY '25, we continue to expect another half of EBITDA growth in H1 FY '26 over H1 FY '25 with further cost efficiencies as well as the benefit from the conclusion of the Ben Roberts-Smith appeal process, helping to offset the weaker-than-expected advertising market. These further cost efficiencies are expected to result in more than $100 million of underlying cost out across FY '26 and '27, ahead of the previously guided $90 million. In an uncertain world, Australians are increasingly relying on Nine to be informed. It continues to be a time of enormous change that's impacting every Australian and local media companies are not immune from this. There are emerging threats to local media and journalism with generative AI platforms scraping our news platforms to train their systems without Nine's permission or any payment. This requires decisive political action to ensure this cannot go on without consequence or commercial arrangement. Earlier this week, we saw the government move with speed to introduce legislation, to parliament, to arrive squarely at requiring global streaming platforms to make Australian content. From a Nine perspective, we now hope to see the same urgency brought to prioritizing legislation to amend the news media bargain code so that tech platforms must once again come to the table and support our investment in Australian journalism, which is not just critical to Nine, it's vital for our democracy. And now I am proud of the progress we have made this year in strengthening the culture at Nine and want to highlight the strong engagement from our people. Our plans for cultural transformation are ambitious, and we would not achieve anything without the commitment to change from everyone at Nine. In line with the recommendations from the in-section report, we have devoted more time and resources to gathering feedback from our people. Our people are proud to work for Nine. They believe the company is well positioned in the media space and feel optimistic about the future. We are incredibly proud of what our people have achieved this year, and I'd like to thank each and every one of them for their efforts. During the year, I was honored to be appointed CEO and Managing Director of Nine at what is important -- an important time in the company's history, and I thank the Board for their support. In particular, I'd like to extend my thanks to Catherine for her support and leadership of Nine, particularly as Chair over the past 18 months. Catherine has been a dedicated and passionate advocate for Nine and our people. And for me personally, a great support as I've taken on the CEO role. And as we've accelerated our cultural and strategic transformation too, we have achieved much during this time, and she leaves the Board at a time when Nine has a strong balance sheet and a clear strategy looking forward. As a leading content provider across multiple platforms with preeminent content assets in Australian media, Nine has a great opportunity ahead. Our portfolio is working together like never before in ways that can't be replicated. Across all of our businesses, we are focused on news that informs, entertainment that captivates and sport that unites. Our assets are being collaboratively -- used collaboratively to maximize the breadth, depth and impact of this focus and uniqueness and usability of the associated data presence, unparalleled opportunities for advertisers. We have the best people and assets in the media sector. We have moved at pace to strengthen the group, and I've been buoyed by the energy and dedication from people across the company as we progress what are undoubtedly ambitious plans to reset and grow the business. We are committed to continuing to strengthen Nine in the interest of all shareholders and our people. Thank you very much.

Thanks, Matt. And now we turn to the formal business of today's meeting. Where undirected proxies have been given to me as the Chair of the meeting, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display on the presentation, the number of direct and proxy votes received prior to the meeting on each resolution. A voting exclusion is in place for Resolution 1 relating to the remuneration report and resolutions 5 and 6 relating to the grant of the performance rights to the CEO. Any vote in favor of these restrictions by or on behalf of a restricted voter, which includes the company's key management personnel and their related parties will be excluded. The first item of the formal business of the meeting -- in the Notice of Meeting is to receive and consider the financial report for the company for the year ended 30 June 2025, together with the directors' report, the auditor's report as set out in the annual report. There is no voting applicable to this item of business. Mr. Stanton has already spoken about the FY '25 results. So I'll make -- now take questions and discussion in relation to the financial report, the directors' report and the auditor's report. Just to remind you, Ms. Wilson and Mr. Wilkin from Ernst & Young are here with us today. Questions relevant to the conduct of the audit, the preparation and content of the independent audit report, the accounting policies adopted by the company and their independence in relation to the conduct of the audit may be directed to them through me. Are there any questions from shareholders in the room holding a yellow or blue card? Yes, we know Don is a shareholder. I vouch for him.

I'm from the Australian Shareholders' Association, and I've been monitoring Nine for a few years.

Can you speak louder, please?

Well, I can put it closer to my mouth. Is that better? I mean maybe you need to get some hearing aids. I wanted to say I represent 50 retail shareholders who have given us their proxies today. It's not that large a number. And every year, we have a discussion about whether or not to include Nine on our list of companies that we will monitor because we are limited in resources. And the point you made about Nine being an important part of the social fabric is a reason that Nine survives on our monitoring list. So I get to enjoy coming to the salubrious surroundings every year.

Thank you for your support, Don.

And also, you've had a very -- you personally have had a very interesting 18 months as Chair, you've had to deal with the devastating cultural report, appoint a new CEO, find two new directors, deal with the first strike rem and even put up with Tim Costello at last year's AGM. I wondered if he might not have come until Peter was off the Board. Okay. Now to a question.

Thank you, Don. Yes?

I was very interested in Matt's outline of strategy. And obviously, he can't be terribly specific about what plans you might have to either buy something or sell something or do something. But it is quite an interesting situation that you're in where you've got quite strong balance sheet. And you've got businesses which are declining like broadcast television and radio, I think, they're both in decline. You did okay in broadcast by gaining share at the expense of others. The question is the cost cutting is one way to deal with those sorts of businesses when it's necessary when things are going down. And I guess I'm concerned that you might be cost cutting in editorial content that is trimming the number of journalists that you have. I once asked Peter Costello whether you would be cutting the number of journalists when Fairfax merged with Nine. And he said, no, you could never do that. They are the source of value to this company. And I wonder if you'd care to comment on that.

Yes. Look, thanks for your remarks, Don. We do have a strong balance sheet, and we will be very, very disciplined in how that is used. We have announced that we are investing in our organic business, a $50 million investment. And as you say, we really can't say much more about what we'll do with the remainder of the funds, but we will be investing it in a disciplined way and then exercising responsible capital management. In relation to our businesses, as Matt mentioned, the Nine 2028 strategy is focused on efficiencies as well as revenue growth. And I don't know, Matt, if you just want to take the rest of that question.

Yes. Thanks, Don. Yes, we are in a good position from a balance sheet point of view. I think the way we think about it is probably three ways is investing in the organic side of the business, and we've sort of talked about that with the $50 million investment that we're doing specifically. Obviously, there's inorganic opportunities that we'll stay attuned to, and there's capital management opportunities. Taking on your point around the cost-out situation, there is absolutely a balance you do as you go through this to make sure you get the level of efficiencies out of the business that -- but continue to keep that strong content creation we have. We've had some very strong performances, and you talked about TV there. Actually, TV audiences in free-to-air have been growth for the last two years actually. And the way we do look at it is actually review on the total TV together. And that has been -- if you look to the first half -- the second half of the financial year, i.e., Jan to June, we actually had revenue growth in there and EBITDA growth. So a very strong performance in there. And the one-off journalism, the only point I'd make on that, of course, we invest in journalism, we will continue to do that in our independence. I did make the point, though, why we feel the news media bargain incentive is so important as well as the impact of the AI from us from scraping and stealing our content. It's like we're paying the journalism and then the revenue is going to somebody else, okay? So that does need to have an intervention now happening. It's a global players that are doing this. And we feel very strongly as we had to do when we lost the Meta money, we went through that, and we looked at some efficiencies. But we do need to continue to invest in our journalism, and we do need support as the local largest Australian media company around that. But I am very conscious of getting that balance right, and we'll continue to look to do that.

Great. Thanks, Matt. Are there any other questions from the floor on this item of business? Yes. Can I just see your yellow or blue card? Fantastic. Thank you.

David Kingston, K Capital. Look, I'm actually going to be fairly complementary today, even though in the last year, I have been critical of Seven West at their AGM and also Southern Cross Broadcasting. But it's fair to say that a number of your traditional media peers have lost 90% of value in the last 10 years. Nine actually has sustained its value, which in the context of media being under a lot of pressure. I think everyone deserves congratulations. How has it achieved that? It's achieved that through getting a very good price for Domain, so well done, a business that you founded. It's also a grown Stan, which shows some promise. Don't know how it competes with the USD 500 billion gorilla, Netflix, but I think with sport and using your local heritage, you seem to compete well. So look, overall, I'd just congratulate you, and I don't always say that. I've certainly been critical of a number of media companies that have lost a lot of shareholder value, but Nine, I think, has done well. But I do have a couple of comments and then questions, Chair, just so that I think shareholders will be interested. Excluding Domain, and I think we've got to be a little bit analyze the FY '25 report because Domain's come out. I tend to focus on EBIT rather than EBITDA. But your group EBIT, excluding Domain, is $229 million, pre-specific costs. But that's okay, but not monstrous. Total TV and radio, $106 million EBIT, Publishing $113 million EBIT. Stan $51 million EBIT. But from that, we have to deduct a share of corporate costs, which is $41 million. Kroll on the Seven merger with Southern Cross has just released its report. It values Seven TV at 4.1 to 4.4x EBITDA. So taking a line through that, I would estimate that your -- value of your TV and radio is probably around about $650 million. If we look -- just to put it in context here, if we look at your current market cap is about $1.8, it seems that your net cash, excluding leases, is around about $150 million. So your enterprise value is about $1.65 billion. If I'm right and we allocate $650 million for TV and radio, leaves a value of about $1 billion for Publishing and Stan. Now I think that's reasonable given the prospects for both because I think ultimately, shareholders look at value and is value sustainable. We all know that TV continues to be under revenue pressure. On the print side, digital revenue from Publishing is offsetting the print copy reductions. And Stan with what you're doing on sports seems to be going okay, notwithstanding the gorilla, you're competing against -- gorillas rather. We note there'll be ongoing cost reductions, but there is ongoing increased local and international competition, likely merger between Seven West and Southern Cross. So just a couple of questions, Chair. Look, given the ongoing volatility of media earnings, particularly traditional media, and I appreciate you're constrained a little bit, but it will be interesting to hear a little bit more about the prospects for the three key divisions going forward, TV, Publishing and Stan. Look, for example, I think you've done very well with AFR. And I think one of the commentaries was that you can't have a favorite child, but the AFR is perhaps the favorite child. I think you've done pretty well there. But if we look at, for example, Murdoch, who paid $5 billion for Dow Jones in America, he's done extremely well out of that by monetizing it because of the fact that it's in finance and finance generally has been doing pretty well. So I'd just be interested in a little bit more on the outlook for those 3 key ongoing divisions because that's what shareholders are looking for. I appreciate you can't say much about acquisitions, that's understandable. There's certainly been some press out there that you might sell radio. But I'd make a brief comment on radio, Chair, that you bought it in 2019, you bought the balance from Singleton when the value of the radio was $275 million. Now we appreciate everything has changed a lot, and there was an impairment last year of $41 million. But the press is speculating you might sell it for $50 million, which is a long way down on the purchase price. But look, overall, I'd just like to congratulate you all. I think over a 10-year period, I look long term, you've done well as a company. Probably the only major traditional media company in Australia that's held its value in the last 10 years. A lot of them have fallen over 90%. So I think congratulations to you. But if you could just provide a little bit more on the outlook for the three key divisions, that would be appreciated.

Great. And look, David, on behalf of everyone at Nine, thank you for your compliments. I think Nine has done incredibly well, particularly compared to local media business, and it's because of everyone in this room and everyone throughout our businesses. It wasn't an accident. When we merged with Fairfax, we brought together two of Australia's iconic businesses, and they have grown and strengthened together. So the value of those businesses together is extraordinary. When we did that merger, we also brought Stan into 100% ownership. And Stan is, I think, the most successful SVOD service -- independent SVOD service in the world. I keep saying that waiting for someone to tell me I'm not right. But I believe it is. And in terms of our strategy, there was a strategy to diversify our revenue streams to subscription revenue streams and that through the publishing and Stan that has been incredibly successful. And that was our deliberate strategy to mitigate the advertising revenue. In terms of the advertising revenue and the total -- that business, we have been working very hard on mitigating the movements in the major advertising market. As Matt said, our content, our viewing on linear television has been in growth for 2 years. So our challenge now is to turn that into revenue. And as Matt said before, Nine 2028 is about cost efficiencies and revenue. So we do see a path to sustainable growth in our core television business. Our strategy there has been to diversify into 9Now and have that offset some of the linear revenue challenges. 9Now is a data-driven business with incredible insights. It's gold dust. I don't know if anyone has a small business, but you can use Nine Ad Manager, go on there for $500 and advertise to a postcode-based thing. So that is an incredibly strong business. Part of the reset operating model that Matt launched was employing Amanda Laing, who is here with us today. So for the first time, we will have an executive that is covering streaming, radio, broadcast and 9Now and driving that business for profitability. So the buck will stop with Amanda, and she's already made great progress in looking at costs and revenues and ways to work those businesses better together. We've already been sharing some stand content with Nine and vice versa. So I think that our strategy is correct, and there is a path to sustainable growth in that core part of our business. I agree Stan has been incredibly successful, and it was gratifying to see the analyst reports increasing the underlying value of Stan in their most recent reports. Again, that was a deliberate strategy when we saw all the international streamers going direct to home. We knew that would be a challenge. So the team decided to diversify into sport, which has been incredibly successful. And that success has accelerated with the purchase of the Optus' Premier League and other sports businesses. Publishing, as Matt mentioned, has 33% margin, which is world-leading. It is an incredible business. It's trusted journalism. As the world gets more and more into black holes and not trusted journalism on other platforms, people are flocking to our trusted journalism in those mastheads. And that business is set for growth and has grown and will continue to grow. You did -- I was trying to drop down your calculations. But look, I think it's interesting to sort of unpick how we're valued. And it's been gratifying that even after we sold Domain, the market is -- does have confidence in our core business. And that was a fabulous thing to see, and Matt and the team have done a really good job in the last year on explaining the strategy to the market, and the market has confidence in that strategy. I would say, though, as Matt and I said last year, we do think the business is still undervalued. There is incredible value. You picked out the AFR. There is incredible value in AFR. There's incredible value in Stan. So I would say we still believe that even though the valuation has held up and increase the assets -- our assets are undervalued because they really do have strength. So I hope that answers most of your questions. Anyone else have a question on this item?

Chairperson, I'd like to ask about gambling advertising.

Yes?

Yes. Over 75% of Australians support the Murphy review recommendation of a total gambling ad ban phased in over 3 years. The government has resisted implementing the recommendations to date, in part due to lobbying from gambling and media companies. But the risk of a gambling ad ban remains in place. So I'm curious to ask, in Nine's lobbying of the government, are you seeking compensation in case of a partial or full ban on gambling ads? Or are you asking the government to resist the Murphy review recommendations? And also curious as to how much revenue is at risk? And then a related question is, SBS has introduced recently some ways to opt out from seeing gambling ads to help protect vulnerable people. Is the company also looking at that same sort of thing?

Thanks. I'm trying to just get your name.

I'm Adam. I'm the CEO of an online broker, called Six.

Okay. Thanks for your question, Adam. Look, we take our responsibilities around socially responsible activities very seriously. We operate gambling ads in a heavily regulated environment with ACMA. You would have noticed that since 2023, the warning messages on gambling advertising have increased. So we believe that gambling across the society is a collective responsibility for all stakeholders. It's government, it's the wagering sector, it's sports organizations, media and also the broader community working together. We will comply with whatever advertising rules come in. We have already have a lot of regulation. We have been talking to the government about what they might want to do, and we have been saying to them, if we are banned from having gambling advertising, there's two things we would ask for. Yes, some type of compensation, some type -- some other reduction somewhere else. But most importantly, that the gambling ban is fair across all sectors. It would not be fair for us to not be able to do gambling and people -- gambling companies to be able to sponsor word searches on Google. That will just mean that the revenue is diverted away from us and is still safe. So our biggest plea is make it fair and across the board and don't disadvantage responsible Australian media companies and allow a gambling free for all in terms of the ad tech platforms. Gambling is a low low single digits of our revenue, and it has been decreasing over the last three years. I don't think we've considered the SBS opting out of gambling. That wouldn't work for our main broadcast service, but we will continue to work with the government and work towards implementing wherever they come to a landing on the gambling regulations. Any other questions on this item of business?

Just a quick technical question, Chair, maybe the CFO or the auditor. And it's a little bit hard to interpret given that Domain has come out. But if we look at Page 126 of the annual report, total goodwill and intangibles is $2.45 billion. We've got to exclude Domain, which had a lot of those intangibles. And by my estimate, it seems that the Nine intangibles have reduced to around about $1 billion or thereabouts. But I'd just be grateful if the CFO or auditor could clarify what are the total Nine intangibles, excluding Domain? And secondly, only part of your intangibles are amortizing, but what is the amortization policy for the goodwill on customer relationships and also on software?

Matt, do you want to take that one or direct to someone?

Well, yes, if we could -- I'm looking at Megan or Martin, unless we feel like we need to come back to you on that question, unless you can answer it now. We can take on notice that's the other way of doing it.

Should we take that on notice and maybe address it at the end of the meeting. So we'll leave Martin and Megan to have it. And maybe if you could just -- I don't know if they jotted down your -- maybe if you could lean to the forward row and maybe that might be the reminder of the question. Are there any more questions on this item of the agenda? Yes, sir?

[ Wolfgang Schwarz ] my name. Just a simple straightforward question is actually, my wife is curious to know, watching the program Golden Bachelor, what would be the production cost to produce this program, you know about the guy who want to choose a lady from the Golden Bachelor.

I will refer that to our CEO.

Yes, Golden Bachelor, was actually made by Warner Bros. We commissioned them to do it. I can't recall the exact cost of the Golden Bachelor. Will be a few millions of cost of it. So it will be a material number for us. It's one of the commissions that we launched this year. I'm just going to -- sorry. So I haven't got the exact number. I don't think we actually give out the exact number on those sort of content. We can give you broad -- I don't know, Amanda, if you know broadly the top of your head, if not, we can come back to the gentleman. We'll come back to you, sir, on that question.

[indiscernible]

Thanks, Wolfgang.

Yes, I know, it's in the millions, right? So those sort of shows, we have a number of tentpole shows, should we say, The Block, The Floor, Golden Bachelor and we pace those through the year through those. And so that would be one of the more expensive content parts of the business we do, which obviously then we look to commercialize through advertising as much as possible. So it's all about tentpoles. So it's one of the larger costs of content for us.

Thank you. Any other questions on this item of the agenda? Great. Any online questions, Rachel? Great. That means we will move on to the next item of business, and that is the remuneration report. Resolution 1 is the adoption of the remuneration report. Votes received on this item of business are shown on the screen. The annual report for the financial year ended 30 June 2025 contains the remuneration report, which sets out the remuneration policy for the company and its controlled entities for the financial year and reports on the remuneration arrangements in place for directors and senior management during that period. The company's overall remuneration philosophy is to provide a clear link between shareholder returns and executive remuneration. In developing executive remuneration arrangements, the Board has sought and will continue to seek input from external parties, including remuneration advisers, proxy advisers and shareholders. The company's remuneration structure and policies are designed to help build and retain talented and motivated leadership and to deliver growing and sustainable total returns to shareholders. With respect to our short-term incentive arrangements, the EBITDA target must be satisfied for 50% of an executive's potential STI to be paid, with the balance depending on achieving personal objectives relevant to the executive's role. In a challenging economic environment, the FY '25 reported EBITDA result of $486 million was 97% of the target set by the Board of $501.7 million. And 70% of this component subsequently vested and was paid to the executive KMP. At the end of our financial year, the CEO was the only executive KMP. Individual measures assessed to the CEO were achieved at 95% of target, resulting in an STI payout of 82% of this STI target. During FY '25 year, performance rights were issued to a number of senior executives under our long-term incentive scheme. These performance rights will only vest if targets relating to earnings per share, total shareholder return and digital transformation are satisfied over the period to June 2027. It is fair to say that these targets were set to be a stretch for the business to achieve. So if the rights vest in '27, we expect that shareholders will have enjoyed strong returns over that period. The performance rights issued in FY '23 were tested over the three years to 30 June FY '25 against the target set three years ago, and only 16% of that LTI grant vested. This is a good demonstration of how Nine's remuneration structure aligns executive remuneration with shareholder experience. The total shareholder return was only at the 37th percentile, which resulted in no vesting of this portion of the grant. EPS. The EPS growth target of 2% was not achieved, which resulted in no vesting of this portion of the FY '23 grant. The strategic hurdle focused on the digital transformation that I discussed earlier invested at 80%. The Board assessed the overall performance of this hurdle on an aggregate basis, taking into account the success of key indicators in the digital transformation strategy, including, but not limited to growth in digital revenue and non-advertising revenue that exceeded their targets. I'll now take any comments or questions in relation to director or executive remuneration policies or anything in the remuneration report, starting with questions from the floor of the meeting. Any questions from the floor? Any online questions, Rachel?

Yes. We've got one question from [ Stephen Mayne. ] We took a good transparency step forward at last year's AGM disclosing the proxy position early to the ASX along with the formal addresses, revealing the 37% rem strike and the 17% vote against the reelection of the new Chair. Why have we regressed this year and withheld proxy disclosures, leaving us debating in the dark and having to ask questions like this one?

Yes. Look, Stephen, thanks for your feedback. There is no usual practice, and we will take on board your feedback around releasing those with the other documents that are the subject of the meeting in advance next time. You will be -- we are pleased to see that we have not had a second strike. We've had 81% vote in favor of our remuneration report, which we are very pleased by. So thank you, shareholders, for your support of the remuneration report.

Part of [ Stephen Mayne's ] question. Did any of the proxy advisers recommend a vote against any of today's resolutions, including the rem report? What reasons did they give?

Yes. Ownership Matters and ACSI recommended in favor of all the voting on our Annual General Meeting notice. ISS and CGI Glass Lewis recommended against the rem report and against the remuneration -- the LTI shareholding [ from that. ] Importantly, they recommended against a spill vote. So their focus was around the remuneration for our CEO. We are extremely comfortable as a Board that we benchmarked and market tested Matt's CEO when we did the international search and that in the interest of you as shareholders, he is being paid the appropriate remuneration. Any other questions, Rachel?

We've got a question from [ Judy Jet. ] On Page 15, the annual report says the reports of inappropriate behavior in the workplace identified by intersection were concerning, prompting a company-wide reflection and response. The Board and the executive leadership team remain committed to transparency and accountability. Since this is widespread in the media industry, not only at Nine, why isn't this factor -- why are these factors addressed in your rem report? And if there's inappropriate behavior, pay should be affected if there is accountability.

Yes. Look, thank you for your question. Matt was appointed as the acting CEO on the 1st of October last year just before the intersection report was published. He and his executive team have really taken on board the cultural issues. As a business, we have leaned into them. We have dealt with the instances of bad performance and the progress has been excellent. So we have rewarded Matt accordingly. In instances of this business where people have behaved badly, they may have left, and they certainly would have had an impact in their remuneration. So we take the issues very, very seriously and on a path for cultural transformation, which is very evident in some of the other information we've released in the annual report, particularly on Page 45 around our -- the survey result, which we are pleased to see, and we'll be looking for improvement.

Nothing further.

Nothing further, great. I will now move on to the next item of business. Resolution 2 is on the agenda for Miyuki Rosen's reelection as a Director of the company. Votes received on this item of business are shown on the screen. Details of Miyuki's experience are set out in the explanatory statement, which accompanied the notice of meeting. I'd now like to invite Miyuki to address the meeting.

Thank you, Catherine, and good morning, everyone. I'm Miyuki Rosen, and I have the honor of serving on the Nine Board.

[indiscernible]

Okay. I will. Thank you. So I've had the honor of serving on the Nine Board for the past 7 years and on the Fairfax Board before that. I also represented Nine on the Domain Board until its recent sale. I have over three decades of operating strategy and Board experience at the intersection of media, e-commerce and technology. I've built and led businesses for global companies such as Yahoo, Fox, Disney and Tribune as well as growth in early-stage companies. I served as a senior adviser to the Boston Consulting Group and built the foundation of my career with McKinsey & Company. I currently advise companies and serve on listed boards in both Australia and in the United States. It has been a privilege to be a part of Nine's growth into a multifaceted media and digital leader as well as seeing Nine through various strategic leadership and cultural transitions. I am both excited and confident about our future given our strong audience, content, advertiser and data foundations as well as the strong vision, values and leadership of our incoming Chair, Matt, as our CEO. As I stand for reelection for my final term, my hope is that I will have the opportunity to continue to serve and bring a strategic global and digital perspective to Nine's ongoing evolution and success. I'd like to thank Catherine, as our retiring Chair, very much for her support and also thank all of you for your consideration. Thank you.

Thank you very much, Miyuki, and thank you, shareholders, for the resounding support of Miyuki's reelection. It's been an absolute pleasure to work with Miyuki since she joined the Board from the Fairfax merger, and I'm very pleased that she is staying for another term and will be able to contribute to the next phase of the company. I will take questions from the floor on this item of business. Okay. Any questions online?

I have one question from [ Stephen Mayne. ] As a long-serving independent director seeking reelection today, could Miyuki please provide a summary of how the Chair succession process was handled?

I'll probably take that. I think I'll take that question. Thanks, Stephen. I have been on the Board for coming up to 10 years. We -- at the end, when I became Chair last year, we had very, very clear objectives around the leadership of the business we've met, around appointing two new directors and being very clear on the strategy and really focusing on the growth of the business. Coming up to my 10-year anniversary, I decided that that's a good time when you're on a Board to step off for 10 years. My view is the business was in incredible shape. We have performed on the strategic and cultural transformation. So I rang up Rachel and said, I think it's time for me to step down coming up to 10 years. And Rachel said to me, we haven't been Chair for that long. But in dog years, it's been a long time. So I don't look at the achievements that I have made in terms of time as being a Chair, it's what we've achieved in that time. And I've achieved everything I wanted to with this business. It's been an absolute joy, as I said, to work with this business. We -- when we were appointing new directors, we didn't go out looking for a Chair. My view was that any director that will be appointed to this Board would be capable of being Chair. We were delighted that Tim and Peter joined the Board and either of them could have been Chair. Based on Peter's media experience, he was the natural candidate, and it was a unanimous decision of the Board for Peter to replace me. So we then announced that. Any other questions?

No other questions.

Yes, David.

Miyuki, you've obviously got excellent experience, and you've been on the Board for a number of years. Just interested in your insights into -- and it's a complement to Nine, overall, it's held its value over the last 10 years, which is exceptional when so many of your peers have lost 90% of value. Just interested in your thoughts as to why Nine has been relatively successful in a chronically down market for traditional media companies in Australia.

I think it's really due to two primary factors. One is smart strategic decisions that we made, both investments as well as nurturing and building both Domain as well as Stan as two examples as well as the operational excellence of the day-to-day work.

Can you speak up a bit, please. We can't you hear you.