Sports Entertainment Network facing financial Challenges with $9.2 million loss
Sports Entertainment Network (SEN) has reported a $9.2 million deficit for the last financial year. This significant loss is attributed to their aggressive acquisition strategy of acquiring sports teams and radio operations.
Recent revelations from SEN’s financial records shed light on the depth of their financial predicament. Documents lodged with the Australian Securities and Investments Commission (ASIC) point to imminent financial challenges. According to these filings, the Commonwealth Bank could potentially demand an “immediate settlement” of the $28.7 million credit facility provided to SEN. Furthermore, the data indicates that SEN’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at $4.7 million.
In the Sports Entertainment Group’s preliminary final report, it’s highlighted that the company has slightly more than $1 million left in its line of credit. To manage its obligations, the company sought “covenant relief” from the Commonwealth Bank in the June quarter. The bank, in response, did not push for immediate settlement of the liability.
Despite the concerning numbers, SEN and CEO Hutchison maintain that the company’s financial health remains robust. According to an official SEN statement, the reported $9.2 million post-tax loss encompassed several accounting adjustments.
The company also provided context for the numbers. During the reporting period, SEN expanded its national radio operations, resulting in substantial initial operational expenses. However, with the network of owned stations now established, these expenses have stabilised.
SEN’s assertive expansion over the past two years has seen them venture into New Zealand, culminating in the purchase of the Otago Nuggets, a team in the New Zealand National Basketball League, in November 2021. However, it’s the establishment of SENZ, SEN’s New Zealand operation, that was a significant contributor to the financial setback, accounting for $5.5 million of the total loss.
SEN’s acquisition and rebranding of Brisbane’s 4KQ radio as SENQ was another significant undertaking. The inclusion of former Australian Test cricketers Ian Healy and Matthew Hayden in this initiative underscores its scale. This raises pertinent questions regarding the long-term financial implications of SEN’s strategic decisions.
Reassuring their stakeholders, SEN stated that these financial figures will not hamper the company’s daily operations. “Our ongoing collaboration with our financier, who has consistently backed our growth, continues to align with our future vision,” the company confirmed, emphasising the stability of their operations.
While SEN faces challenges brought on by aggressive expansion and significant expenses, the company remains optimistic about its financial trajectory and operational stability.