Company Analysis: Nine Entertainment Co. Holdings Limited

This report analyzes the corporate governance, board orientation, and communication policies of Nine Entertainment Co. Holdings Limited, an Australian media and entertainment company listed on the ASX.

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Company Analysis: Nine Entertainment Co. Holdings Limited

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Table of Contents
Executive summary.........................................................................................................................3
Introduction......................................................................................................................................4
1. Summary about the NEC background with its recent history..................................................5
2. Corporate governance at Nine Entertainment Company..........................................................6
3. Board Orientation.....................................................................................................................8
4. Interpretation of NEC’s communication using legitimacy theory.........................................12
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

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Executive summary
This report has been presented over the analysis of Australian business as Nine Entertainment
which is listed on the ASX. From the report, it has been found out that the Nine Entertainment is
carrying out its operation with the effective policies. It can also be identified that the corporate
governance is consisting with the composition of board which includes chairperson, director and
non –executive directors as Peter Castello, Hugh Marks, David Gyng, Janette Kendall and
Catherine West. From the report of its CEO and chairperson, it is found out that the business is
focused on premium advertising solution, domain, news, stan and cost synergies. As per the
board orientation, Nine Entertainment is performing well in the media and entertainment
industry as it revenue has increased by 6% in the year 2018. Further, the communication policies
are also addressed with in concern to the legitimacy theory in which it is identified that the
business is following effective processes in order to share their objectives and fulfill the
expectations of perspective society in Australian market.

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Introduction
The main purpose of this report is to carry out the analysis of an ASX listed company as Nine
Entertainment Holdings which is located in Sydney, Australia. This report analyzes the company
with respect to its market and current business practices. Along with this, it also includes the
demonstration of corporate governance structure of Nine Entertainment Holdings in which
includes the company board, non –independent director with the reports from CEO and
chairperson. In addition to this, this report also researches on the orientation of company board
with including the media releases. On the other hand, the communications aspects of NEC
business have been interpreted with the use of legitimacy theory.

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1. Summary about the NEC background with its recent history
For this report, NEC company has been selected which is an Australian public listed business on
the Australian Stock Exchange (ASX). This business is basically a joint venture company that is
incorporated with the Consolidated Media and Broadcasting Limited by 50/50 shared
partnership. This company has been established in the year 1956. This business is basically
dealing in the media and entertainment industry. Nine Entertained Company committed to deal
in the broadcasting television and business productions in the Australian market. It is managing
the different media entities such as Nine network, Nine publishing along with the investment
arms such as 9Saver, Macquarie media limited, Pedestrian tv, Australian community media and
printing, RSVP and Stuff .co.nz and so on (Static9, 2019). On the other hand, this business is
also engaged into the distribution and creation of content video subscription, digital internet
along with the providing advertising services on TV and different platform of media.
The Nine Entertainment Holdings has engaged into the takeover of Fairfax Media which is
announced a $3 billion in which NEC has represented the 51.1% of its total share. This takeover
is expected to result into the Australia’s largest media company which will also be significant
step to strengthen the media and entertainment leader in the Australian market. Along with this,
recently, Nine Entertainment has also announced the sale of it’s a business as Australian
Community Media and Printing and this announcement has been declared by 30th April 2019.
The ACM has been evidenced to sale by 30th June 2019. Due to this successful completion of
ACM sale deal, Nine Entertainment will acquire $115 million as cash proceeds. On the other
hand, Nine Entertainment has also broadcasted the biggest event on Television as state of origin.
Business has broadcasted it successfully as the 37th annual best of three events in between the
states as Queensland and New South Wales which was for Rugby league teams. It was really a

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tremendous event which has successfully reached with the more than 9 million viewers and this
year it is expected to create a history. In addition to the Nine Entertainment, Ninja Warrior, The
Block, Love Island Australia and the Nine Entertainment will also bring in sports as NRL Finals
and Grand Final, State of Origin, The Ashes and The Presidents Cup (Nineentertainmentco,
2019). On the other hand, news and lifestyle will be included by Nine Entertainment as The
Australian Financial Review Magazine and Traveller.
2. Corporate governance at Nine Entertainment Company
The corporate governance is basically an important system for the business through which its
processes, mechanism and relations are maintained and business attempts for delivering good
governance. Under the corporate governance, business is directed and controlled along with
addressing the interests of kind of its stakeholders. The Nine Entertainment Corporation is also
following the framework of governance that is compiled with the principles and
recommendations from ASX.
1. Composition of board:
The Nine Entertainment business has key people in its board composition with its independent
director. Over the reporting period of Nine corporation, Peter Castello is reported as independent
director but Peter Castello was also chairperson of company (Static9, 2018). At the reporting
period of business, the key people in its board are as follows
 Peter Castello: He is an independent director along with the chairperson and Peter is
working since 2013 and he is also a member of audit and risk management committee.
 Hugh Marks: Hugh marks is a dependent director of Nine Entertainment and he is the
chief executive officer and director.
 David Gyngell: David was the former CEO of Nine Entertainment.

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 Janette Kendall : Janette has joined the Nine Corporation from June 5th, 2017 and he has
also been assigned a committee member as people and remuneration committee.
 Catherine West: Catherine is an independent member of Nine Entertainment Corporation
and he is also a member of audit and risk management committee and chairing the people
and remuneration committee.
 Samantha Lewis: Samantha is an independent member of media and Entertainment
Company and he is the chair person f audit and risk management committee.
2. Reports from the CEO and chairperson:
The CEO of Nine Entertainment has presented the report for the financial reporting as result
briefing as The CEO Hugh Marks presented the report and he stated the primary factors which
are driving value creation for business as
- Premium advertising solution
- Domain: The domain has been strengthening by brand building capabilities (Static9,
2019).
- News: It has established the brand utilization of resources as video –led rooms in
Australia
- Stan: It has optimized the content acquisition across the SVOD, FTA and BVOD.
- Cost synergies: It has established pro forma at least $50m.
3. Remuneration report
The remuneration policy of Nine Entertainment is followed by the rules and regulations of ASX
in the Australian market. The director and CEO of Nine Entertainments has compensated for $5
million for the financial year 2017-2018. On the other hand, it is also attributed that the
companion is paying by Nine Entertainment below the standards of industry. As, the

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compensation to non- executive independent director as Samantha Lewis is paid as A$981.6k.
Along with this, the Catherine West who is the independent non –executive director at Nine
Entertainment and Catherine have been paid as A$624.6k.
3. Board Orientation
NSE is the leading media company of the Australia. There are seven board members who
handled independently different positions and responsible for the particular department. It has
been analyzed from the company’s annual reports there are seven non independent board of
directors are sitting in the board panel of the company where there are one independent non
executive chairman namely Peter Costello, independent non executive deputy chairman namely
Nick Falloon, chief executive officer and director namely Hugh Marks and 4 independent non
executive director namely Patrick Allaway, Samantha Lewis, Mickie Rosen and Catherine West.
As per the analysis of the recent annual report, it is analyzed that the group EBITDA of
$257million i.e. 25% on FY 17 and increased by 6% in group revenues (Nine, 2019). The share
price of Nine group in the area of Free to air Market which returned to growth over the year
underpinning the result. Similarly, growth in the other media channels of the company seems
high i.e. 9Now and Digital publishing. The net profit of the company was increased by 27% after
deducting all specifications as compared to the year 2017.It is also identified from the current
growth prospectus of the company the board members plays an important role to frame the
strategic policies of the company and take strategic investment decisions in the company to
improve its position in the long run (Anstey and Riggar, 2017). Below given table indicates the
major elements that stated that the company improves its performance as compared to its last
year performance in some of the major areas.

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(Source: Chandrasekaran, et al., 2014)
It is analyzed that the revenue of the company in the above table is high i.e. $M1237.8 to 1318
i.e. 6% variance in the revenue. The revenue of the company was increased by 6% as compared
to the previous year. Similarly, group EBITDA is also increased by the 25% in 2018 as
compared to the previous year. It indicates that the policies framed by the Broad members and
top executives are much viable that positively influence on the company’s profits. Similarly, an
another item that clearly indicates the good working capital and liquidity position of the
company increased by 122%.moreover Earning per share (EPS) and dividend per share (DPS)
also increased by 27% and 0.5Cents in 2018. It means that the company earned the good profits
from its strategic investments and return to their shareholders. Furthermore, it is also analyzed
from the director’s report of the company. The current users of the company are 6.8 million users
with this Media Company and leading broadcast network in 25-54 demographics (Herman,
2016). There are 6 experienced board of directors are associated with the company for last 10
years and handle the responsibility appropriately and provide major contribution in the
company’s operational and financial growth. It has been depicted from the figures of the latest
annual report of the company like Nine has achieved great progress during FY18 like increased
in number of Audiences on Free to Air TV, Broadcast Video on demand. In terms of
subscription, video on demand across border digital publishing assets Apart from that it is also

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analyzed from the Board composition and employees of the company according to the corporate
governance rules. There are 50:50 ratio of the composition of males and female ratio of board
members. Apart from that the percentage of the total employees in the company are 58% male
category and 42% female category (Financial Results, 2018). It indicates that the company
effectively managed the diversity in the company. The company engage the people well and they
are safe according to the latest reports of the audit company namely AON Hewett.
As per the website latest new releases it is identified that the company organized the donation
camp on 10 June to donate the $42 million to the Sydney’s Children Hospital foundation that can
be live telecast by the company on television from 9:00 am AEST to 9.This is the strategic
marketing promotional strategy of the company to increase the number of subscribers on the
channels that will helps the company achieve good profits. Similarly, an another event organize
by the company in Australia related to the game namely Holden State of Origin Series that is
unique game series for the viewers that is telecast live by the company on televisions to increase
the number of viewers and subscribers for the particular channel (ND paper, 2019).. This digital
marketing event promotional strategy is appropriate for the company to get millions of views on
channels. It is the leading strategy that adapt by the company through post unique content and
games on the channels to attract the major number of viewers on its media channels.

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(Source: Priest, et al., 2014)
The strategy of the company is exceptional as compared to its competitors due to attractive and
creative contents posted on the websites and different channels capture the attention of the
customers in the long run. The company published the digital contents with the name of the
different programs like “Harness the Power of Premium Content with Nine, “State of Origin”
and the “Voice returns with strong growth in demographics”. So overall analysis of the report
and website information it is identified that the company perfectly balance the composition of
board members to maintain the diversity in the company (Reid & Turbide, 2014). Apart from
that the company’s effectively participated in social charitable functions to enhance its
promotions through different videos and channels to access millions of customers.

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4. Interpretation of NEC’s communication using legitimacy theory
The Nine Entertainment corporation is concerned with the following an effective communication
policy through which the audience and stakeholders are communicated regarding the required
information.
Legitimacy theory is one of the key theories that are used in relation to disclosing the
communication about its corporation. The main crux of the legitimacy theory with respect to
communication is to share and broadcast the important information to its stakeholders. The Nine
Entertainment business is also concerned about to communicate with respect to legitimacy
theory, it has developed the environmental and social voluntary about the information so that the
social contacts with the business can be anticipated (Nineentertainmentco, 2019). It will enable
the corporation to determine its objectives and surviving in the complex and highly competitive
environment. The Nine Entertainment business delivers the information to its shareholders
through the website of company as www.nineentertainmentco.com.au. This website is updated as
soon as possible so that the stakeholders can access the information as financial reports, ASX
releases, corporate governance and other relevant information to its stakeholders. On the other
hand, the Nine Entertainment has also developed the share registry which directly encourages the
stakeholders to receive the communication in proper manner. With this, the Nine Entertainment
Corporation has also developed the share register over the electronic mode so that the
shareholders can share the information easily and quickly. Furthermore, the major aim of Nine
Entertainment is to anticipate its objectives and fulfill the needs of its shareholders so that it has
enabled the stakeholders to raise the questions at the Annual General Meeting and the issues and
problems are cleared by the Nine Entertainment in quality manner (Static9, 2018). With this, the
stakeholders can ask the questions regarding their issues with the business over the electronic

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comment section and the Nine Corporation emphasizes on the effective communication
(Herman, 2016. On the other hand, the Nine Corporation is also concerned about the delivery of
report according to the expectations of perspective society in the Australian market.

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Conclusion
On basis of the above analysis, it can be concluded that the Nine Entertainment business is
performing well in the Australian Media and Entertainment industry. It can also be concluded
that the corporate governance is managed with its board of director and management of
corporate. The corporate governance is consists with the executive director and non –executive
director. With respect to board orientation, the financial performance of business has increased
by 6% for year 2018 as compared to year 2017. On the other hand, it can also be concluded that
the legitimacy is also followed with respect to the communication process of Nine
Entertainment.

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References
Anstey, E. and Riggar, T.F., (2017). Interviewing for the Selection of Staff. Routledge.UK
Chandrasekaran, S., Littlefair, G., Joordens, M., & Stojcevski, A. (2014). A comparative study of
staff perspectives on design based learning in engineering education. Journal of modern
education review, 4(3), 153-168.
Financial Results (2018). Financial Reports. Retrieved:
https://www.nineentertainmentco.com.au/investor-centre/results
Herman, R. D. (2016). Executive leadership. The Jossey‐Bass handbook of nonprofit leadership
and management, 167-187.
ND paper (2019). Investor relations. Retrieved: http://www.ndpaper.com/eng/ir/reports.html
Nine (2019). About. Retrieved: https://www.nineentertainmentco.com.au/insights-and-news
Nineentertainmentco, (2019). Board of Director. Retrieved from:
https://www.nineentertainmentco.com.au/investor-centre/board-of-directors
Nineentertainmentco, (2019). Insights and News. Retrieved from:
https://www.nineentertainmentco.com.au/insights-and-news
Priest, N., Esmail, A., Kline, R., Rao, M., Coghill, Y., & Williams, D. R. (2015). Promoting
equality for ethnic minority NHS staff—what works?. Bmj, 351, h3297.
Reid, W., & Turbide, J. (2014). Dilemmas in the board-staff dynamics of nonprofit governance.
Nonprofit governance: Innovative perspectives and approaches, 163-182.
Static9, (2018). Nine: CORPORATE GOVERNANCE STATEMENT 2018. Retrieved from:
http://prod.static9.net.au/_/media/Network/NineEntertainmentCo/PDF-Downloads/2018-
Corporate-Governance-Statament.pdf

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Static9, (2018). Nine: FY18 Results Briefing. Retrieved from:
http://prod.static9.net.au/_/media/network/nineentertainmentco/financial-reports/presentation-
fy18.pdf
Static9, (2019). Nine: Board Charter. Retrieved from:
http://prod.static9.net.au/_/media/Network/NineEntertainmentCo/PDF-Downloads/Board-
Charter-May-2019.pdf