Southern Cross Media Group announced on Thursday the television market it entered when it merged with Seven West Media in January had "deteriorated materially more than anticipated" in the June quarter.
As a result, the corporate owner of the Seven Network, Triple M, the Hit Network and the West Australian newspaper is slashing hundreds of jobs, downgrading its guidance and writing off millions of dollars from a burdensome television content contract.
Southern Cross now expects to deliver earnings of $185 to $190 million in 2026/27, compared to its previous forecast of $200 million to $220 million.
"We must reset our cost base to meet current market conditions and capture the full benefits of scale across our trusted platforms for our audiences and advertisers, now and into the future," the company's new chief executive and managing director Rohan Lund said.
"Unfortunately, this means saying goodbye to some talented colleagues who have helped build our business.
"We are deeply grateful for their contributions and we are committed to supporting them through this transition."
Most of the 250 to 300 staff to be laid off are mid- and back-office and corporate staff, Southern Cross Media Group said.
A spokesman would not provide a breakdown of where they worked.
"Today's ASX announcement outlined the scope of our operational review. To respect our team's privacy, we will not be commenting further," he said.
The announcement was "devastating news for journalists and audiences and further highlights the growing instability facing Australia's media workforce", Media Entertainment & Arts Alliance media director Cassie Derrick said.
Southern Cross expects the restructuring to cost about $20 million in the current year.
The company also expects to declare an onerous contract provision of $65 to $70 million related to its legacy television contracts.
An assessment was ongoing, but Southern Cross said given structural changes in the television advertising market, it was revising downward the benefits likely to be derived from a range of its legacy content contracts.
The company would not say which contracts it was referring to but Seven has some expensive sports contracts, including a $4.5 billion, seven-year deal with Foxtel to screen AFL matches.
Southern Cross said it expected to bring in $1.86 billion to $1.87 billion in revenue in 2026/27, about 2.5 per cent less than its previous guidance.
"This reflects weaker market conditions," it said.
Despite the slump in advertising revenue, television viewership was up by 1.1 percentage points in the financial year to date through the end of May, the company said.
Close to 4pm, Southern Cross shares were down 5.1 per cent to a three-week low of 56 cents.
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