Southern Cross Media Group Ltd (ASX: SXL) shares are plummeting this morning after news broke that the company's agreement with Nine Entertainment Co. Holdings Ltd (ASX: NEC) will not be continued. At the time of writing, the company's shares have tumbled 13.57% to $1.91.
Let's take a closer look at what was announced.
What happened?
The Southern Cross share price is taking a dive today after the company (also known as Southern Cross Austereo) stated it has been advised Nine will not be extending its regional affiliation with the broadcasting company after it expires in June.
This morning Nine confirmed it's discontinuing its affiliation with Southern Cross Media and has instead signed an agreement with WIN Corporation. While losing its affiliation with Nine is a devastating blow for Southern Cross, it still has supply agreements with Seven West Media Ltd (ASX: SWM) and Network Ten.
Southern Cross stated that its ongoing agreements currently contribute around 20% of its television revenue.
The company will continue to broadcast Nine programming in the Spencer Gulf, where it also broadcasts Seven and Ten. Further, it broadcast's Seven programming in Tasmania, Darwin and central regions in an agreement that expires in 2022.
Broadcasting of Nine programming in regional Queensland, southern New South Wales and regional Victoria by Southern Cross Media will cease on 30 July 2021.
About Southern Cross
Southern Cross Media boasts a reach of 95% of the Australian population, a number that will likely soon fall following today's news.
The company owns 99 radio stations under the Triple M and Hit network brands.
Southern Cross also provides Australian sales representation for SoundCloud and Sonos Radio, as well as operating LiSTNR, a free audio platform.
Southern Cross Media share price snapshot
Over the past 12 months, the Southern Cross Media share price has fallen by more than 60%. The company's shares have, however, increased by around 27% over the last six months.
Based on the current Southern Cross share price, the company has a market capitalisation of around $584 million with approximately 264 million shares outstanding.
