(MORE) BREAKING NEWS:
Southern Cross Austereo (SCA) has introduced that it has signed a Binding Phrases Sheet for the sale of its tv licences in Queensland, southern New South Wales and Victoria to Community 10.
“This announcement reinforces Paramount’s dedication to the Australian market and specifically Community 10,” mentioned Beverley McGarvey President Community 10, Head of Streaming & Regional Lead, Paramount ANZ.
Completion of the sale is topic to sure situations, together with applicable regulatory approval.
SCA is in dialogue with different events for Tasmania, Spencer Gulf/Damaged Hill, Darwin, Distant Central and Jap Australia (together with the Viewer Entry Satellite tv for pc Tv service) belongings.
On 28 August 2024, Southern Cross Media Group Restricted (ASX: SXL) (SCA) introduced that it had re-commenced a strategic assessment of its non-core regional tv belongings and was in energetic negotiations with a number of events with an curiosity in buying these belongings.
As the primary consequence of that strategic assessment, SCA pronounces that it has signed heads of settlement for the sale of its tv licences within the three aggregated markets of Queensland, southern New South Wales and Victoria (3-Agg Markets) to Community 10. SCA at the moment broadcasts Community 10 applications below regional affiliation preparations in these markets.
Completion of the sale is topic to execution of ultimate transaction documentation by the events and SCA’s broadcast transmission, distribution and playout service suppliers, and satisfaction of customary situations together with receipt of overseas funding approval. The events intention to finish these issues by the tip of February 2025.
The phrases of the sale present that SCA can be entitled to obtain a share of the revenue of the 3-Agg Market licences for 5 years after completion of the sale (Participation Interval). Integration of the three Agg-Market licences below Community 10’s possession and management will ship an improved and extra sustainable earnings consequence in comparison with SCA’s present earnings profile below its regional affiliation preparations with Community 10.
The consideration to be acquired by SCA can be depending on promoting market situations over the Participation Interval and can be paid quarterly in arrears. Based mostly on present and forecast promoting market situations, SCA at the moment expects the mixture gross consideration to be acquired by SCA over the Participation Interval to be within the vary of $15 million to $20 million. The online current worth of this gross consideration on completion of the sale is anticipated to be within the vary of $10 million to $15 million.
SCA can even be entitled to a share of any “digital dividend” acquired by Community 10 if Community 10 surrenders its spectrum within the 3-Agg Markets to the Authorities through the Participation Interval. On 1 November 2024, the Minister for Communications, Michelle Rowland, introduced the Authorities’s intention to “discover pathways for the way forward for tv, formed by the potential of realising a digital dividend” whereas additionally stating that the Authorities had not “recognized, or determined to yield, a digital dividend.” There’s accordingly no present proposal for the Authorities to pay a digital dividend to Community 10 or every other tv broadcaster at any time.
Community 10 will start working the 3-Agg Market licences from completion of the sale. SCA will retain its native salesforce within the 3-Agg Markets and can present third celebration native promoting gross sales illustration companies within the 3-Agg Markets for Community 10 through the Participation Interval on industrial phrases below an promoting gross sales companies settlement.
SCA has agreed with BAI Communications to excise broadcast transmission companies for the 3-Agg Markets from SCA’s ongoing contract with BAI Communications and, as a situation precedent to completion of the sale, Community 10 and BAI Communications are to enter a brand new contract for broadcast transmission companies for the 3-Agg Markets for the remaining time period expiring on 1 September 2034. SCA can be accountable for termination charges below that new contract if Community 10 workout routines a proper to terminate the contract for comfort after expiry of the Participation Interval however would even be eligible to an offsetting share of any digital dividend acquired by Community 10 upon give up of spectrum to the Authorities between the tip of the Participation Interval and 1 September 2034. SCA expects to recognise a legal responsibility in its full 12 months FY25 monetary report within the vary of $3 million to $5 million in relation to that legal responsibility. In accordance with relevant Australian accounting requirements, calculation of this legal responsibility will contemplate the likelihood of any legal responsibility crystallising on account of Community 10 terminating its contract with BAI throughout that interval.
SCA has acquired curiosity from a number of different events and continues to be in energetic negotiations concerning sale of SCA’s tv belongings in Tasmania, Spencer Gulf/Damaged Hill, Darwin, Distant Central and Jap Australia (together with the Viewer Entry Satellite tv for pc Tv service). SCA will replace shareholders on the progress of those negotiations in accordance with its steady disclosure obligations.
SCA intends to use the proceeds of the sale of its tv belongings in direction of lowering its web debt.
Accredited for launch by the Board of administrators.
