Southern Cross Media Lowers FY26 Revenue to $1.87 Billion, Targets 300 Job Cuts

Revenue and Earnings Downgrade Amid Weaker TV Market

Southern Cross Media Group (ASX:SXL) has trimmed its FY26 revenue guidance to $1.86-$1.87 billion, down around 2.5% from prior forecasts of $1.91-$1.92 billion. The revision primarily reflects a sharper-than-expected deterioration in advertising market conditions during the fourth quarter, especially within the TV segment. Despite this, the Group continues to gain revenue share in both TV and audio, partly supported by synergies from its recent merger with Seven West Media.

Underlying EBITDA is now expected to fall between $185 million and $190 million, down from the previous range of $200 million to $220 million. Including a non-cash accounting adjustment related to onerous contracts, reported EBITDA is forecast at $190 million to $195 million. These adjustments underscore the challenges facing the media giant as it navigates a rapidly evolving advertising landscape.

Aggressive Cost Reduction Program Targets $150 Million Savings

In response to these headwinds, Southern Cross Media has unveiled a substantial cost reduction program designed to reshape its cost structure and fund strategic growth initiatives. Building on merger synergies that have already delivered $30 million in annualised savings ahead of schedule, the expanded program aims to achieve $145 million to $150 million in annual run-rate benefits once complete.

The company plans to reduce its workforce by 250 to 300 full-time equivalent positions by the end of June 2026. These cuts will predominantly affect mid and back office, corporate staff, and non-labour expenses. The restructuring is expected to incur a one-off charge of approximately $20 million in FY26. Managing Director Rohan Lund acknowledged the difficult nature of the job losses but emphasised the need to align the cost base with current market realities.

Onerous Contract Provision Reflects Legacy TV Content Challenges

Southern Cross Media also flagged a significant non-cash onerous contract provision related to legacy TV content agreements. The Group anticipates setting aside $65 million to $70 million as part of the purchase price accounting process from the Seven West Media merger. This provision, subject to final audit confirmation, will reduce reported non-revenue costs by around $5 million in FY26 and approximately $30 million in FY27, without impacting cash flows.

The move highlights ongoing structural shifts in the TV advertising market and the need to reassess the profitability of existing content contracts amid a subdued economic outlook.

Audience Metrics Show Resilience Despite Market Pressures

Despite financial pressures, Southern Cross Media’s audience metrics remain robust. Total TV audience share has increased by 1.1 percentage points year to date through May 2026. In radio, HIT leads the 25-54 demographic with a 19% share, while Triple M dominates men aged 25-54 with 22%. The West Australian newspapers report monthly unique audiences of 3.36 million, and the national digital publication The Nightly attracts 3 million monthly readers.

These figures suggest the Group’s content and platform strategy continues to resonate with audiences, providing a foundation for future growth once cost structures are reset.

Merger Integration Progress and Outlook

Southern Cross Media completed its acquisition of Seven West Media in January 2026, with merger synergies already delivering ahead of expectations. The company is now focused on consolidating these gains and managing the cost base to weather ongoing market volatility. The FY26 full-year results and FY27 guidance will be released on 11 August 2026, offering investors a clearer view of the merger’s financial impact and the effectiveness of the cost reduction program.