Nine (ASX:NEC) and News Corp (ASX:NWS) share prices rise after Facebook deal

Nine Entertainment (ASX:NEC) and News Corporation (ASX:NWS) shares are both trading higher after news of deals with Facebook were announced.

| More on:
2 businessmen shaking hands, indicating a partnership deal and share price lift

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of Nine Entertainment Co Holdings Ltd (ASX: NEC) and News Corporation (ASX: NWS) are both trading higher during Tuesday's session. At the time of writing, the Nine share price is sitting at $3.03, up 1.34%. Meanwhile, the News Corp share price is trading 0.89% higher at $31.86.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is also in the green today, currently having risen by 0.91%.

The positive share price movements for the media companies come following recent news of both companies signing deals with Facebook Inc (NASDAQ: FB).

Facebook to pay News Corp, signs letter of intent with Nine

News Corp announced today it has come to a three-year agreement with Facebook under which the social media giant will pay News Corp for use of its Australian news content. This includes content from publications including The Australian, The Daily Telegraph, and news.com.au.

The company also announced today that Sky News Australia, a News Corp cable television network, has come to a parallel agreement with Facebook.

News Corp had previously come to an agreement with Facebook for its US content in October 2019.

Commenting on today's announcement, News Corp CEO, Robert Thomson said:

The agreement with Facebook is a landmark in transforming the terms of trade for journalism and will have a material and meaningful impact on our Australian news businesses.

He added:

We are grateful to the Australian Prime Minister Scott Morrison, Treasurer Josh Frydenberg and the Australian Competition and Consumer Commission Chair Rod Sims and his team for taking a principled stand for publishers, small and large, rural and urban, and for Australia.

Mr Thomson was referring to the recently passed News and Media Bargaining Code legislation enacted by the Australian Government. Facebook and Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) owned Google were the initial subjects of the law.

Facebook was so opposed to the code it initially blocked all Australian news from being shared on its platform for five days. The social media company only dropped the news ban when the government agreed to make several amendments to the bill.

Prior to today's announcement from News Corp, speculation was already circulating yesterday regarding a possible deal between the company and Facebook.

News Corp did not disclose the value of the deal.

The Australian Financial Review (AFR) is reporting today that Nine Entertainment has also signed a letter of intent with the US$780 billion social media company. Nine is unlikely to formally announce a deal, according to the paper.

Facebook News

Facebook intends to showcase news on its latest Australian offering, Facebook News. Launched in 2019, and coming to Australia soon, a section of the platform will be devoted to displaying news stories personalised to individual user preferences. Facebook will pay publishers for this content.

The company had previously excluded Australia from the initial launch of the product due to the aforementioned dispute with the government over its media code.

Nine and News Corp share price snapshots

One year ago, the Nine and News Corp share prices were sitting at $1.17 and $14.76, respectively. If an investor had bought shares in one of these companies at that time, they would be sitting on a tidy 159% or 116% return on investment.

The market capitalisations of Nine and News Corp are $5.1 billion and $1.3 billion, respectively.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Share Market News

5 things to watch on the ASX 200 on Friday

A good finish to the week is expected for Aussie investors.

Read more »

A man has computer-generated images rushing through his head indicating an AI (Artificial Intelligence) concept of a communication network.
Technology Shares

ASX investors are obsessed with Nvidia shares! Here's why

The global chipmaker reported a 94% increase in annual revenue in the third quarter.

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two racing cars battle to take first place on a formula one track with one tailing the the leader and looking to overtake the car.
Opinions

Down 21% in 2024. This ASX 300 stock looks like a money-making monster

Profits are expected to plunge, but the future could still be bright.

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
52-Week Lows

Down 68% from highs, this ASX 200 stock just hit a 4-year low. Time to pounce?

Is this beaten down stock a buy? Let's see what one leading broker is saying.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Share Market News

Insider buying alert: 3 ASX 200 shares directors are snapping up right now

Directors in some of Australia's blue-chip businesses aren't shying away from the market.

Read more »