👉 Background: Nine Entertainment Co is the group behind a whole range of broadcasting and publications. Think: Channel Nine, 2GB radio and 3AW radio as well as The Sydney Morning Herald, The Age and Pedestrian. But don't forget streaming platform, Stan, too.

👉 What happened: It's not an ideal time for publishers hunting for advertising dollars so it’s no shock that Nine’s net profit for the past six months dropped from $225m to $190m in the corresponding period. It saw a 17% increase in costs across Stan Sport as well as one-off events like the coverage of the Queen's death.

👉 What else: While Nine's revenue grew by 5% to $1.4 billion, this revenue sadly doesn’t pay the bills for a mature company - especially one that is out of its rapid growth phase.

What's the key learning?

💡In the long term, profit is the critical metric for a sustainable business, but it’s not always the case in the short term.

💡For example, in the past, Amazon was known for prioritising revenue growth over profit - particularly in its early years. Amazon reinvested heavily in expanding its business and infrastructure.

💡But this is generally only acceptable for companies in a high-growth stage of their business. For a well-established company like Nine, investors want to see the bottom line profit growing.

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