Nine Entertainment Co Holdings Ltd (ASX: NEC) shares are edging higher this morning following news the company has signed an affiliation agreement. At the time of writing, the Nine share price is trading 1.65% higher at $3.08
What's driving the Nine share price?
The Nine share price is on the move today as investors digest the company's latest update.
According to this morning's release, Nine has entered into a regional television affiliation agreement with WIN Corporation (WIN).
Founded in 1962, WIN is Australia's largest regional television network company. The group provides television and radio broadcasting services into 29 markets across six states in Australia.
Terms of the deal
Under the agreement, WIN will broadcast Nine's metropolitan free-to-air television content from popular channels such as 9, 9Go, 9Gem, and 9Life. This access will be provided across geographical markets in Tasmania, Victoria, Queensland, southern New South Wales, and regional Western Australia.
Nine stated that its television content will now be available across all of metropolitan and regional Australia.
The new agreement will commence on 1 July 2021, and run for a minimum period of seven years.
WIN will pay Nine with an affiliation fee of about 50% of its entire regional advertising revenue. This is expected to positively contribute to Nine's earnings before interest, tax, depreciation and amortisation (EBITDA) from FY22. Furthermore, WIN will provide airtime to Nine through its television and radio network to promote Nine's content.
A sales representation service from WIN will also be provided to Nine in northern New South Wales and Darwin for an agreed time.
Management commentary
Nine CEO Hugh Marks welcomed the deal, saying:
While our relationship with Southern Cross has been strong over the last five years, the opportunities presented by the WIN Network to both extend the reach of Nine's premium content into more regional markets under one agreement, and to work co-operatively with them on a national and local news operation, mean this is the right time for us to return to WIN.
WIN CEO Andrew Lancaster went on to add:
We are pleased to be furthering our already strong relationship with Nine, through this affiliation agreement. Nine has clearly established itself as Australia's leading media business and we are excited to be returning to carriage of the Nine broadcast content to our regional viewers.
About the Nine share price
Over the past 12 months, the Nine share price has trekked on an upwards slope, with gains of close to 150%. Nine shares are currently within a whisker of reaching their record high of $3.16.
Nine has a market capitalisation of around $5.1 billion, with approximately 1.7 billion shares issued.
