The Nine Entertainment Co. Holdings Ltd (ASX: NEC) share price is in focus this morning, following news of a strategic shake-up. Nine is acquiring digital outdoor media platform QMS Media for $850 million, while offloading its radio assets and transitioning its regional TV station NBN to affiliate status. Digital growth businesses are expected to generate over 60% of revenue by FY27, up from about 45% in FY25.
What did Nine report?
- Acquisition of QMS Media for $850 million (cash and debt free basis), with completion targeted before 30 June 2026.
- Sale of Nine's radio assets for $56 million and conversion of NBN to affiliate under WIN Network for $15 million.
- Net one-off cash tax loss benefits of approximately $178 million, offsetting tax from a previous Domain stake sale.
- Pro forma EBITDA contribution of $113 million from these transactions in CY26, with an implied multiple of 5.3x.
- EPS accretion forecast: marginally positive pre-synergies and low double-digit percent including synergies in FY26.
- Expected unfranked dividends for FY26 and part of FY27 due to tax loss utilisation reducing available franking credits.
What else do investors need to know?
Nine's asset reshuffle means future growth will be more heavily anchored in fast-growing, resilient digital segments, including Streaming, Outdoor and Publishing. The acquisition of QMS, a digital outdoor market leader, adds significant scale and a complementary revenue stream to Nine's portfolio.
The Group expects cost savings of up to $20 million a year from integrating QMS, particularly through shared back-end operations and procurement. On the flip side, the sale of the lower-growth radio and regional TV businesses will allow Nine to focus on its core metro and digital assets. Nine's leverage will rise temporarily to about 1.8x but is anticipated to revert to its target range (1.0x–1.5x) by the end of FY27.
What did Nine management say?
Matt Stanton, CEO, said:
Today's announcements mark a critical milestone in our Nine2028 transformation. These transactions will create a more efficient, higher-growth, and digitally powered Nine Group for our consumers, advertisers, shareholders and people. This positions Nine well for the future, enabling the Group to withstand industry disruption and deliver long-term sustainable value to our shareholders.
What's next for Nine?
Nine is accelerating its transition into a digital-first media business. Management sees significant opportunities from cross-platform advertising, greater operational efficiency, and bundled offerings for advertisers. The addition of QMS is expected to add new capabilities and help Nine diversify revenue further.
Nine continues to guide to EBITDA growth in H1 FY26 and expects its balance sheet to strengthen post-2027 after realising transaction-related tax benefits. Investors should note dividends will temporarily be unfranked due to reduced franking credits, but the company remains committed to a 60–80% payout ratio of net profit before significant items.
Nine share price snapshot
Over the past 12 months, Nine Entertainment shares have declined 20%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.
