There was a strong suggestion at yesterday’s PBL press briefing that “restructuring costs” would again be seen in the company’s financial reports as interim Nine CEO Sam Chisholm struggles to get costs under control and maximise revenues.

The briefing was probably a sign of the growing confidence in the management team. But PBL couldn’t quite see its way to allowing the Seven Network representative into the invitation-only briefing. Still, for Australia’s largest media group with a much larger gaming business attached, it was a welcome re-emergence into the public arena, especially with all the problems at the Nine Network, which was the focus of attention at the briefing.

The company sliced $27.9 million in a non-recurring restricting cost in the year to June, with $3.5 million of that “relating to head office”: the third floor at Willoughby. Nine’s gross profit margin slumped from a record 35% in the first half of the year to a low of 23% in the second half and I asked James Packer if he expected the Nine gross profit margin would improve in the present half (which is the best period for the TV business).

After he hedged, saying that the company doesn’t give forecasts, I added that the company would have to be expecting an improvement from such a very low level and he conceded, “yes.” With ad industry revenues growing around 4% and expected to continue at that level for the rest of the year and a determination to hold down costs to inflation levels, Nine has more belt tightening to contend with if that gross margin is to rise and rise quickly.

But ad industry analysts say that growth at the moment is more like three percent on an annual basis and Nine in particular is finding it tough filling its slots for September. More discounting will be needed and that will lead to more pressure on costs. The write-down in the cost of the Commonwealth Games of around $20 million for Nine will put the March 2006 event in a position to break even or make a small profit. Likewise, the $90 million write-down in the value of the TV program inventory (movies and mini-series) will lower the company’s cost base from this year on, allowing Network stations in Sydney, Brisbane and Melbourne more room to boost that profit margin.

The media concentration on Nine’s problems has clearly ruffled feathers with an appeal from James Packer at the briefing for questions on gaming and magazines: the media obliged, but both areas are clearly not in trouble. It was troubled Nine the media wanted to focus on, the old Packer icon that wasn’t on the market “in any way,” according to the chairman.