UCA Funds Management adds Nine Entertainment Company to exclusions

UCA Funds Management has added Nine Entertainment Company to its list of excluded companies due to its “market leading position in attracting advertising revenue from the gambling industry.”

The ethical funds manager cited the “dominance of online gambling advertising and promotional placement screened in Nine’s G-rated time slots and prime-time sports broadcasts,” as well as alcohol advertising, another industry exclusion for the fund manager. Nine Entertainment Company is “the market leader by revenue” in attracting advertising from the gambling industry, and although it is not known precisely how much advertising Nine garners from the gambling industry, the industry average is 3.9% of total revenue, said Michael Walsh, chief executive officer, UCA Funds Management.

“There’s the nature of the advertising as well, in terms of its association with major sports events, G-rated shows, and placement in prime time television viewing,” Walsh said. “It’s not unusual to see an entire advertising segment solely occupied by online betting companies, alcohol and sometimes one other organisation, and then you’ve got the associated advertorial as well. That’s a material exposure in the major products. We know [Nine] is the market leader, we know the industry average, and the rest of the materiality comes from the nature of what we’ve described.”

UCA Funds Management is not currently invested in Nine Entertainment. The ethical fund manager is strongly engaged on efforts to mitigate or limit the negative impacts of gambling. Earlier this year, UCA Funds Management formed a coalition with consumer rights advocates and financial counsellors to engage with major banks to limit online gamblers’ ability to use credit cards to fund gambling activities. UCA Funds Management and the members of the coalition see risks to allowing gamblers to use credit for online activities, which can quickly rack up debt for financially vulnerable people.

“Our engagement focus is on the payments system and the major banks,” Walsh said. “They’re two interrelated issues here – the fact that online betting companies have been given unfettered access to the best television viewing hours in Australia and then secondly, that they also have unfettered access to the payments system and its facilities –we think it’s an established principle that you don’t give credit to gamble and we think this is the best starting point – to stop access to credit cards.”

When UCA Funds Management added Nine Entertainment Company to its exclusions list, the company was invited to discuss their concerns. The media group did not respond, UCA Funds Management said.

Separately, UCA Funds Management also congratulated Mayne Pharma group for appointing Nancy Dolan the first woman to serve on the board. UCA Funds Management recently invested in Mayne Pharma Group in a bid to engage with the company to encourage the company to appoint one or more woman to the board.

UCA Funds Management backs the campaign to see ASX200 companies reach 30% women on boards by 2018, and normally excludes companies without women on board, Walsh noted.

“We deviated from our policy and decided to buy the stock and write to the company to point out that they didn’t have women, and to note that our policy is to track companies moving towards 30% women,” Walsh said. “Now we’ve seen a female appointment and we congratulate them in that appointment and we hope that Mayne Pharma is an organisation that moves forwards towards that 30% target. In the letter, our discussion was also that in the health sector, a large number of women have developed careers… This is the sector where women occupy far greater proportion of senior roles which are a usual prerequisite for board appointments. It’s about looking around and applying women to apply and focusing on a short list of candidates.”

UCA Funds Management this year reached its own internal target of 30% women on board, Walsh said.