Today, it was just announced that American broadcaster CBS is the winning bidder in the purchase of the financially strained Ten Network Holdings and is now pending approval from the Foreign Investment Review Board. This is significant news given that 4 days prior, competition watchdog, the ACCC had approved the proposed joint acquisition of the company by two leading figures in media: Lachlan Murdoch and Bruce Gordon. Unfortunately, their proposal could not fall through on time due to the pending media reforms to be passed by the Australian Senate.
As some background, TEN Network was placed into voluntary administration and then into receivership in June this year after succumbing to financial difficulties. Until now, it has been uncertain as to how the media giant will be led.
CBS is a listed media giant based in the US with a valuation of US$28 billion (or $35.3 billion). It currently holds 33 percent stake of Channel Eleven. It is predicted that this deal will ‘take over Ten’s digital terrestrial channel, One, Eleven and TenPlay.’
CBS has shown strong optimism as to the prospects of Ten Network under their administration.
“We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar.” Les Moonves, CEO of CBS says.
On top of Ten’s free-to-air existing networks, CBS is further planning to introduce a subscription-based content streaming network, the CBS All-Access which will compete with other streaming networks such as Netflix, Stan and Amazon Prime.
According to the CEO, the first step is to refinance existing debt, including the $200 million debt to the Commonwealth Bank of Australia as well as the guarantor fees of $30 million owed to Lachlan Murdoch, Bruce Gordon and James Packer.
Perhaps many of you readers may see so much potential for concern. After all CBS is one of the largest broadcasting giants in the world. At the moment, our media industry is becoming more and more concentrated – with the diversity and quality of shows diminishing. The ACCC, who has yet to comment on this deal has reassured the community after approving the earlier joint acquisition proposal that they will keep a prudent eye on future agreements to preserve the integrity of our media industry.
Let us know your thoughts about the CBS acquisition of Ten Network by tagging us at #lawpath or @lawpath.