Nordic pay and free TV and streaming provider Nordic Entertainment (NENT) is taking further cost-cutting steps to stave off the threat to its profitability this year in the face of the Coronavirus crisis.
NENT, which is facing a perfect storm that includes reduced sports coverage due to the postponement or cancellation of sports events, lower advertising demand levels, and the postponement of content production orders, is aiming to cut costs, excluding sports rights costs, by a further SEK700 million (€62.5 million).
The move follows a decision already announced to not report media rights costs for postponed sports events in its income statement until such time as they take place, not to make any new payments for postponed sports rights until they resume, and to seek compensation for any sports events that are cancelled.
NENT’s board will also no longer propose the previously indicated cash dividend of SEK 7.0 per share for 2019, nor any executive long-term incentive plan for 2020, to its upcoming AGM.
The new cost-cutting measures include reductions in programming and production spend, the deferral or cancellation of any non-core or non-essential development projects, lower sales and marketing spending, and the cancellation of all executive incentive plans for 2020.
NENT said it did not intend to permanently reduce staffing levels, but freelance and consultant costs are being reduced and new hires are only being made for essential positions.
The company said that temporary price reduction for Viaplay direct to consumer packages including sports implemented last week has been received well, and the total subscriber base has continued to grow with limited churn.
It said that the merger of the Viasat Consumer business and Telenor’s Canal Digital is proceeding as planned and the EU approval filing will be submitted in the coming days. The group will also launch the Viaplay streaming service in Iceland this Spring as planned.
NENT Group will however temporarily pause its previously announced saie of its non-scripted production, branded entertainment and events businesses in NENT Studios.
“This is the third announcement in the past week about how we are quickly and proactively responding to the impact of the Coronavirus on our business. We always work to stay ahead of both opportunities and challenges, and we are doing the same now. This is an unprecedented situation that is evolving every day, but let me repeat that we remain in good shape and our operations are running with limited interruption, which is all credit to the fantastic resilience and agility of our platforms and people,” said Anders Jensen, NENT president and CEO.
“Our top priorities are the wellbeing of our employees and continuing to deliver the best possible value to our customers. The measures that we are now taking are all about ensuring the long-term health and potential of what drives our business – our people, our content and our technology. The viewing, listening and streaming KPIs for our entertainment services are very encouraging, as people spend more and more time with us.
“The proposed executive and shareholder compensation adjustments are all about ensuring alignment between the operating and financial stakeholders in the business. As a representative of both, I have no doubt that these are the right actions to take in the circumstances. We are well funded to support the continuing development of the Group’s businesses, and the fundamentals of our strategy and the opportunity that we have with our streaming operations are unchanged.”
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