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TEN reports $285m loss, proposes new $200m debt facility.

TEN has reported a $285 million loss for the year but proposed a new financing plan.

hamish_mclennanTEN has reported a $285 million loss for the year to August but proposed a new financing plan to invest in building ratings.

The result for the year ending August compared with a net loss of $12.9 million a year ago, and was impacted by one-off charges of $336.2 million, including a large TV impairment charge.

Analysts had expected a net profit of less than A$1 million.

TEN proposed a new four-year $200 million debt facility from the Commonwealth Bank, guaranteed by its major shareholders Lachlan Murdoch, James Packer and Bruce Gordon.

The financing facility will be subject to shareholder vote at the annual meeting on December 18.

TEN CEO Hamish McLennan, said “The Board and management of TEN recognise time and financial investment are required to build ratings and revenue, which is why a new Financing Facility is proposed.

“TEN’s management needs to focus on investing in its strategy to build ratings, while maintaining cost disciplines in other departments.”

“The strict cost control will continue, but we are investing in content that will appeal to our core target market of people aged 25 to 54, such as the XXII Olympic Winter Games in Sochi, Russia, the XX Commonwealth Games in Glasgow, Scotland, and the KFC T20 Big Bash League competition.

“The focus on 25 to 54s, the investment in premium sport, the upcoming launch of our new breakfast and morning television line-up, the recent restructuring of our Sales department to better address client needs, and the introduction of tenplay are key elements in our strategy to improve TEN’s ratings, revenue and earnings.

“TEN’s turnaround continues to be strongly supported by its major shareholders.

“TEN would not have been able to access this source of finance from CBA on such favourable terms without the support of our major shareholders who are providing guarantees.

“TEN will have flexibility to implement the turnaround. Our strategy will be measured, prudent and consistent,” he said.

TEN shares opened 1.7 per cent lower at 28.5 cents.

Source: smh.com.au. Reuters

20 Responses

  1. Clofts nobody seemed to answer your question. Yes a network can go broke. And the one that did was Ten, which was put into receivership 20 years ago now. And the Lowys sold out their interest prior to that admitting TV wasn’t their strong point. So it can happen again. The interesting thing with the loan was that Gina, another major shareholder didn’t guarantee the loan. She clearly put ego aside and looked at the bottom line. At the right price and with a completely new board and management Ten may be viable and attractive. Meanwhile I’m sure its lobbyists in Canberra will urge lower licensing fees and diminishing Aussie content when its problems lie elsewhere.

  2. @Jason – it will rate highly as Vancover Live rated 1m. So I expect it to rate even more than that because its in primetime, and Ten will use Winter Olympics and Comm Games to promotes its own shows.

  3. @Bazza – Hear, hear (or should I say ‘here here’). Kindergarten-English mistakes. Their/there/they’re, its/it’s, would of/would have, and a classic below “Australia one everything”. The word one is seeking is “won”. And of course it should be Jesus (with a capital).
    But back on topic. Winter Olympics won’t rate. Never has, otherwise Nine would still have it. Both the Olympic and Comm Games will be big loss-makers. “Our strategy will be measured, prudent and consistent”. Well, that’s a worry.

  4. The real loss is $12.9m.

    Most of the $285m loss is because they are paying half as much for the licence and had to pay out redundancies as they ditched the News and Current Affairs strategy. They will save money in the long-term.

    I like the way they are plugging the Commonwealth Games as a plus. It is listed in their financial report as part of $58m in costs for “onerous programming contracts” that don’t make money, which they blame on previous management.

    Sochi won’t make money, Ten are hoping it will disrupt viewing patterns and form a platform for launching their 2014 season (which consists of half a season of Elementary in the category of shows rating over 700k with reasonable 25-54s).

    In February are Australians going to be watching the Australian Open and cricket or skiing? Ten is hoping they still watch cricket because the BBL is their only possible upside at…

  5. @oztvheritage – I am going to step in, the Winter Games won’t be simulcast at all with One and Ten airing different events. Comm Games rates highly and its in prime time. I would watch the BBL as you should be grateful that its on FTA and not Pay TV. It will give it more exposure which will be huge for Ten

  6. Its hard to find any positives. A $200 million Debt facility over 4 years, ie 50m a year. In ch10s book that is just a couple of stuff ups.

    On recent form, not a lot of hope is there.

  7. TEN are crazy if they think there investment in sport is going to turn things around….The winter games have never rated in this county. Should be shown on ONE….not Ten. The last Com Games rated poorly as Australia one everything and competition did not exist. As for Cricket Big Bash…..Only two states of Cricket fans will watch at a time…. Not fans Australia wide….make or break in 2014. Murdoch has sooo much to answer for!!!

  8. @bettestreep2008 – Telstra have been flirting with buying a Network for a few years and even had their eye on Channel 9 recently. Murdoch wants Telstra out of Foxtel, so wouldn’t be surprised if somewhere down the line Telstra take TEN and leave Foxtel (backroom dealing with Murdoch).

  9. @ArmchairAnalyst, not sure you are liking Hamish Maclennan….he’s the one who signed off on A league of their own, Recipe to riches, The bachelor and is likely to have signed off on those ‘event’ reality programs that died a few years ago, which they are bringing back next year …..

    He’s at the helm this year and this year’s results is just as bad if not worse than last year ……

  10. Armchair Analyst they need to improve on there video quality its terrible the only thing is really clear is there ads haha well getting off topic seven nine & ten need to fix there video quality i mean youtube video have better quality & maybe ten,seven,nine need to follow youtube & use there settings to change the quality

  11. Should they post a loss following the Big Bash and Winter Olympics come June 2014, I have a sinking feeling the major shareholder might pull the pin and let Ten enter receivership.

  12. I think Gina and Lachlan will be happy with this news. Eventually Ten will have to be sold and Rupert has his eyes on his very own free to air network. Imagine it – 24/7 screenings of the Bolt Report!

  13. When major shareholders offer guarantees to the Commonwealth Bank you realise this may well be the last hurrah for Ten. It is gutsy and high risk. Let’s hope they have the content strategy to pull them through because there is no evidence of that so far.

  14. I wonder if Gina, Lachlan and Bruce thought they would be having to fork out more money when they innitialy baught shares in TEN over two years ago now. If TEN want to increase there revenue then they should be offering the best content that there is. aswell as commisioning the best content. Content is still king as i keep saying. TENplay is ok but i think they need to explain to people how it is going to work, either signing in and paying or just signing in. The problem with TEN is that they have lost trust and need to work doubly hard to earn it back. I like the way Hamish has done things shows just how much Lachlan stuffed things up as well as the former CEO James Warburton’s inexperience. If TEN are clever and know what people want they will succeed.

  15. Forgiving the Morning Show and Glasgow….let’s focus on the result…applauding.

    A $258m Loss – because they cannot manage their business.

    When will Chairman Lachlan be held to account ?

  16. “Glasgow, Scotland”. Can we please stop this recent American idiocy of having to add country after city names. This was introduced for the Americans who have no idea what country Paris is the capital of.
    But the “loss” wasn’t a real “cash” loss, it was a “a large TV impairment charge”, whatever that is (something to do with the value of their licences I guess).
    Let’s hope they don’t blow this bundle on more Lachlan-induced failures.

  17. Ten are dreaming if they think their morning line up is going to rate well, at least for the first six months. The Olympics well rate well, but that is only two weeks.

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