Free-to-air network shares surge after the government cuts TV licence fees

Samuel Johnson poses with the Gold Logie Award for Best Personality On Australian TV during the 59th Annual Logie Awards. Scott Barbour/Getty Images

Shares in Australia’s listed free-to-air TV networks jumped after the federal government cut licence fees.

At the close, Nine was up 4.49% to $1.395, Seven West Media 4.2% to $0.735 and Southern Cross 7.1% to $1.28.

Ten is in a trading halt after going into voluntary administration earlier this month.

The government reduced the fee for Australia’s commercial television broadcasters to zero from a bout $127 million for the 2017 financial year and replaced it with combined spectrum usage fees of about $43.5 million.

The networks, struggling in a shrinking advertising market, have been lobbying for cuts in fees and reform to media law such as abolishing the two-out-of-three rule which stops one company controlling a radio, TV network and newspaper.

Nine says the change will mean a reduction in licence fees of about $33 million.

The network increased its full year earnings guidance to between $200 million and $210 million, from the previous $158 million to $187 million.

Southern Cross says the move will save $11.8 million in the current financial year and the company expects its spectrum usage fee won’t be more than $4 million in 2018.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.