RSN purchase boosts Sports Entertainment Group’s revenue

Sports Entertainment Group’s acquisition of Victorian racing radio station RSN helped the media company generate an additional $858,816 in revenue in the first four months of the deal.

The impact of RSN’s integration into the SEG business, which is headed by chief executive Craig Hutchison, and is the parent company of SEN, SEN Track and which also operates events, publishing and TV production, was detailed in the company’s half-year report, released on Wednesday.

The report confirmed the final purchase price for RSN, formerly owned by the Victorian racing industry, was $3.25 million, with $1.892 million attributable to the radio license, $371,000 to the trademark, and $972,000 in goodwill.

SEG paid $1.188 million of that amount, with further payments to follow over the next two years.

“SEG is investing in the racing vertical, which we see as an adjacent industry to sport with material future growth,” the report said.

The upside for SEG is becoming clear, as reports show revenue from the RSN business for the four months between September 1 and December 31.

“The acquired business contributed revenues of $858,616 to the consolidated entity,” the report said.

Upon taking over RSN, SEG combined content with its SEN Track offering, but retained the separate frequencies and the RSN Brand.

Previous on-air and production staff at RSN, including Andrew Bensley and Michael Felgate, finished up ahead of the September takeover.

Cost savings from this were not detailed in the SEG report, but across the business, it said that talent, programming and rights costs remained stable, supporting margin expansion.

In addition, in late November, SEG agreed to terms to broadcast on Racing and Wagering Western Australia’s radio network across WA.

Overall, the SEG business reported $9.7 million underlying EBITDA, up from $5 million in the same half last year, with an underlying profit of $5.9 million.

Media revenue across the company grew 11 per cent year on year, from $ 32.9 million to $36.7 million.

The company has updated its EBITDA forecast growth to 40 per cent in the current financial year. Shares jumped 7.27 per cent on Wednesday to 30 cents, giving SEG a market cap of $83 million.