Nine Entertainment Shares Drop 34% After Special Dividend Payout

Nine Entertainment – Special Dividend Funded by Domain Sale

Investors may have been surprised to see Nine Entertainment’s (ASX: NEC) share price open 34 percent lower, a movement largely explained by the mechanics of its special dividend. On 9 May 2025, Nine announced the sale of its 60 percent stake in Domain to US property group CoStar for AUD $1.4 billion. 

At the same time, the company declared a special dividend of 49 cents per share, equating to a total distribution of AUD $780 million. The payment is funded directly from the sale proceeds and represents a substantial capital return to shareholders. Management’s decision reflects a clear priority to distribute excess capital rather than pursue large acquisitions in the near term. 

While Nine has been linked to potential deals in radio and outdoor advertising, CEO Matt Stanton emphasised that the company remains focused on organic investment opportunities and has set a high bar for future acquisitions.

For investors, the immediate benefit is a significant one-off cash return on top of ordinary dividends, though it is important to note that this higher level of payout is not expected to continue, as it stems from an asset sale rather than recurring earnings.

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Special Dividends Explained: Why Share Price Drops Aren’t a Loss

It’s important to understand that when a company pays a dividend, the share price usually drops by about the same amount on the ex-dividend date. This is because the cash moves out of the company and into shareholders’ hands. The drop in price does not mean you have lost money. For example, if a share is worth AUD 2.00 and the company pays a 20-cent dividend, the share price may fall to AUD 1.80. But you also receive 20 cents in cash, so your total value is still AUD 2.00.

Nine Lifts Revenue to $2.68b on Strong Stan and Digital Growth

Nine Entertainment additionally reported full-year revenue of AUD $2.68 billion, an increase of 2 percent from the prior year, driven by strong momentum in streaming, where Stan delivered 10 percent growth, and a 6 percent uplift in digital revenues. Together, these two segments now contribute nearly half of group revenue. 

Nine’s Profits Weaken as TV Margins Shrink, Digital Holds Firm

Group EBITDA declined 6 percent to AUD $486 million, reflecting a margin of 18.2 percent, down 1.6 percentage points. EBIT fell 9 percent to AUD 328 million, while net profit after minorities was AUD $166 million, down 12 percent. 

Segment performance was mixed: publishing margins expanded to 29 percent on the back of digital subscriptions and cost discipline, and Stan improved its margin to 12 percent, supported by sports-driven subscriber growth. In contrast, broadcast television margins contracted to 13 percent as rising costs outpaced revenue gains.

Nine Targets Growth with $140m+ Investment in Tech and Digital Platforms

Nine invested AUD 92 million in capital expenditure during FY25 and expects to spend AUD 85–90 million in FY26, with a further AUD 45–55 million directed toward growth initiatives in technology, artificial intelligence, ad tech, and consumer platforms. Strategically, the company strengthened its long-term positioning by securing Premier League rights for Stan Sport, launching advertising on Stan to create a new revenue stream, and advancing its newsroom transformation to a fully digital-first model.