On Tenterhooks: Network Ten in Voluntary Administration
How it happened and what this means for viewers.
Australia’s third largest commercial network, Network Ten, has entered into voluntary administration following the departure of key investors. The company ceased trading on the ASX, and has appointed Korda Mentha as administrators in response to a $250 million loan from the Commonwealth Bank no longer being guaranteed to replace the $200 million overdraft owed.
What is the Situation for the Station?
In an official statement, Ten revealed the business may be sold or recapitalised by its administrators. With a share price that has fallen 84.91 per cent and losses of $232 million, this outcome did not come as a surprise to board members who warned the company to cut costs, renegotiate contracts with US suppliers, and secure licence fee cuts. TV historian and author Andrew Mercado notes that this is the third time the broadcaster has been in financial strife, previously avoiding liquidation in both 1972 and 1990. Mercado attributes the current state of Network Ten to the abandonment of their traditional youth audience for more news-centric programming that was devised in 2011.
The Future for Network Ten
Network Ten being in voluntary administration will allow time for the company to be restructured without pressure from creditors, suppliers and other claimants. Ten CEO Paul Anderson said in a statement to the press that Korda Mentha will implement a three-step plan over the next month that will involve
- Business continuing as usual
- Assessing TEN’s finances and operations
- Reconstructing through sale or recapitalising
Communications minister Mitch Fifield has proposed changes to the media ownership laws which would allow media investors Lachlan Murdoch and Bruce Gordon to convert their debt into equity and become the majority owners of Network Ten. Some industry leaders have also speculated as to the possibility of a foreign entity attempting to purchase Ten should it be sold in the reconstruction. It is too early to predict the fate of Network Ten, however with the assurance of business as usual there is no need for widespread panic that the next season of The Bachelor won’t make it to air- but it may mean significantly fewer helicopter dates as costs are cut.
Let us know your thoughts on Network Ten entering voluntary administration by tagging us @lawpath or #lawpath.
Lily is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With a keen interest in media and IP law, her research focuses on the evolving role of the law to navigate new and emerging information platforms.