Network TEN could be placed into Administration as early as today.
The TEN board held an emergency meeting yesterday and plan to meet again today, following a 48 hour trading halt.
A number of media articles today speculate about how things could play out from here, what it means and who could end up taking control.
Central to the latter issue is the passage of media reform laws and the “2 out of 3 rule” preventing someone from owning newspapers, television and radio in the same market.
Renegotiating onerous deals with CBS and 20th Century FOX, valued at around $150m, is also central. The drama has reached international press, including Variety, Hollywood Reporter & Britain’s Financial Times, most of whom lead with a Murdoch angle.
At present TEN’s value is $59m after ongoing freefall of shares. Over the past six months, the share price has fallen from over $1 to 16¢. But this also makes it valuable as an entry price. Names including News Corp, Foxtel, Bruce Gordon have all been flagged in various articles and even a joint venture between Murdoch – Gordon. James Packer is understood to be looking for a buyer for his shares. All three could also convert their debt to equity and become the outright owners.
Most are agreed TEN is a long way off being shut down, but it is a question of how it will look, whether other moving parts will align in its favour and how many jobs might be affected. The company could be put into administration – where the directors get to pick who cleans up the mess – or receivership, where it is the banks’ call, or in this is case the Commonwealth Bank’s call.
A receiver, which wouldn’t report to the shareholder guarantors, would have a responsibility to get the best price for the TV network. The guarantors would have the right to bid for the assets in an auction, according to the loan agreement.
One Nation leader Pauline Hanson, whose party votes are central to media reform votes says any sympathy she has is shared with the other 260,000 Australian businesses who closed their doors, went bankrupt or simply shut down in the last financial year.
“Channel 10’s lack of profitability isn’t a result of the government’s two out of three rule — it’s largely due to poor programming and poor management,” she told The Australian.
But senator Stirling Griff from Nick Xenophon’s team said the network would have been in a stronger position if the two-out-of-three rule had been repealed.
“It may have facilitated a merger that would bring about economies of scale and enable them to sell or put together a stronger media advertising package,” Senator Griff said.
TEN company secretary Stuart Thomas yesterday said in a statement to the Australian Securities Exchange “TEN’s board is considering the position of the company in light of the position being taken by Illyria and Birketu and the range of restructuring and refinancing initiatives it has underway,”
“Pending these determinations over the coming days, TEN considers that its shares will not be able to trade on an informed basis and, accordingly, requests the trading halt.”