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Highlights:
- Seven West Media has entered into an agreement with Cricket Australia to extend cricket media rights to the 2030-31 season.
- With the extended agreement, the viewers of 7plus will be able to watch cricket for free and live.
Shares of Seven West Media Limited (ASX:SWM) jumped on ASX today (3 January 2023) after the company unveiled that its cricket rights have been extended to the 2030-31 season from the 2024-25 season.
Seven share prices gained 3.80% to trade at AU$0.41 per share at 10:46 AM AEDT with a market capitalisation of AU$613.73 million. Including today’s share price movement, the share price has dropped by 34.92% in the past one year, while it has gained 2.50% in the last six months.
Meanwhile, the Australian equity market benchmark index, ASX 200 (INDEXASX:XJO) was down 1.04% to 6,965.80 points (at 11:14 AM AEDT).
Seven is an Australian media company with broadcast television, publishing and digital presence in content production.
Details of the extended cricket rights
Through an ASX filing, Seven informed the market that it has entered into an agreement with Cricket Australia, under which its cricket rights have been extended to the 2030-31 season. As reported, it is a seven-year agreement between the parties.
With this agreement,
Source: company update
The agreement will include two Indian tours to Australia and two Ashes Series. Also, Cricket Australia will revamp the Big Bash League (BBL) to create a tournament that will last for five to six weeks.
SWM said that it has also offered a revenue share upside on the BBL as part of the commitment to improve the BBL. The company will pay increased right fees only if it achieves some BBL revenue hurdles, which are anticipated to deliver positive earnings every season.
Financial terms of the contract
SWM informed that it will pay AU$65 million annually in cricket media rights from 2024. It represents a reduction of 13% on the current agreement. The agreement comprises a 2% escalator per year.
In comparison to the existing rights deal, the company has achieved cash savings from production savings and rights reduction of over AU$50 million over the term.
Management Commentary
James Warburton, managing director and chief executive officer of SWM, commented on the development:
Source: company update
