Hugh Marks.

Nine Entertainment expects to save spending on drama and children’s programming as part of a radical plan to slash costs by $266 million this year.

That’s on the assumption the entire NRL season is cancelled and the prolonged production shutdown results in no further spending on drama or kids’ content this year.

As the COVID-19 crisis flattens TV advertising revenues, Nine announced it will fast-track a three-year $100 million reduction in costs in its free-to-air business that was flagged when it released its interim results in February.

Meanwhile the Media Entertainment and Arts Alliance (MEAA) called on employers to rehire sacked staff after the federal government agreed to subsidise wages with a fortnightly $1,500 Jobkeeper payment per worker as part of a $130 billion economic stimulus package.

Nine said it expects to save $130 million in NRL rights fees if the NRL season is cancelled plus $28 million from broadcast content, primarily from local drama and kids’ programs.

In addition, it will cut operational costs by $68 million – including sales, travel and the removal of bonuses and commissions – and defer $30 million in capital expenditure and $10 million in spectrum charges to the government.

The company said the advertising market was increasingly uncertain, with a likely negative impact from April onwards.

These economies come despite strong ratings growth in Nine News, A Current Affair and the Today Show, and a lift in subscribers for 9Now and Stan.

Nine CEO Hugh Marks said: “This is a very difficult time for all Australians on many levels. Notwithstanding an expected significant impact on the business as conditions continue to evolve, we are confident that with our enhanced audience position, our mix of assets and the commitment of the Nine team, we will emerge from this period a stronger and more competitive company.”

The MEAA welcomed the wage subsidy, particularly for sole traders and freelancers. CEO Paul Murphy said: “The vast majority of workers in the arts and entertainment industries are employed in insecure jobs.

“Freelancers normally rely on income from job to job and gig to gig. This precarity meant that COVID-19 threatened to push them out of our industries and into the never-never.

“An income subsidy is vital to keep these people engaged with their regular places of work and to ensure the arts and entertainment industry is best placed to rebound quickly once the current crisis is over.”