Sports media bigwig Craig Hutchison’s SEN has posted a $9.2m loss as the company racks up debt buying sports teams around the nation.
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The loss comes as financial documents filed with the Australian Securities and Investments Commission state that the Commonwealth Bank, with whom SEN have taken out a $28.7m line of credit, is entitled to recover “immediate settlement” of the loan.
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The reports state that the company’s earnings before interest, taxes, depreciation and amortisation from its operations was $4.7m, making the financial year loss approximately double the gross earnings.
Sports Entertainment Group’s preliminary final report states that the company has just over $1 million available in the line of credit, but had to ask for “covenant relief” from the bank in the June quarter.
Covenant relief is when a lender temporarily forgives a borrower’s breach of loan terms.
“The covenant relief confirmed that the bank did not exercise its right to request immediate settlement of the liability,” the report said.
The Herald Sun reported that shares in the company are currently trading around 20 cents, half the price compared to when Hutchison took over the company in January 2018.
Despite a global pandemic tanking stock markets in the interim, SEN’s share price has fallen further since the country emerged from lockdown, with shares sitting at approximately 25 cents at the conclusion of pandemic restrictions.
An SEN statement provided on behalf of Hutchison said that the company intended to renew their relationship with Commonwealth Bank.
“We have a close working relationship with our financier and continue to work within the parameters of our facility which is due to expire 31 August 2024 (as disclosed), with our intention to renew for a further term in due course,” the statement read.
SEN has made a number of significant investments since being taken over by Sports Entertainment Group.
The company expanded into New Zealand under the SENZ brand, and purchased the New Zealand National Basketball League team the Otago Nuggets in November 2021 – the SENZ division was the primary contributor to the loss, ending the financial year $5.5m in the red.
The company formerly held a 20 per cent stake in Victorian NBL franchise Melbourne United, which was sold off to finance the purchase of the Perth Wildcats.
Hutchison also bought out Brisbane’s 4KQ radio network to rebrand as SENQ, bringing on names such as former Australian Test cricketers Ian Healy and Matthew Hayden as part of the operation.
Notably, after the collapse of the Collingwood Super Netball franchise, SEN was responsible for buying up the vacant eighth licence, based in Melbourne’s southeast and operated by Netball Australia in 2023 before transferring to SEN control in 2024.
Hutchison reportedly earned a $500,000 bonus in the last financial year according to the Herald Sun, which brought his 2022 income to almost $1.5 million.
He is one of the biggest personalities in Australian football media, and currently presents Nine’s Footy Classified on Monday nights, having worked as a journalist since 1994.
He started media content provider and public relations company Crocmedia in 2006 alongside fellow journalist James Swanwick before rebranding the company as Sports Entertainment Network in 2020.
A spokesperson for Sports Entertainment Network made the following statement to news.com.au.
“In response to the recent media article published in the Herald Sun today, please find attached Sports Entertainment Group’s FY23 results announcement that was released to the ASX on 31 August 2023, which provides appropriate commentary on the FY23 period.
“While the headline $9.2 million loss after tax was quoted, this included a number of accounting adjustments, including impairments and non-recurring abnormal costs. Excluding these adjustments the Group made an underlying EBITDA profit of $4.8 million.
“As an overall summary, within the reporting period our business completed its expansion of its national radio footprint, which contributed to significant upfront operational costs. With this footprint of owned stations complete, this cost base has now normalised.
“We continue to have a close working relationship with our financier who have been supportive of our growth journey to date and remain supportive of our long-term strategy.
“Rest assured, there is no impact to our operations.”