Network Ten’s own directors have given the clearest indication yet that the embattled broadcaster is in a life or death battle for survival.

In a fresh warning, the company’s leadership said it needed “favourable outcomes” in a range of financial dealings to contain the looming threat to its viability.

The directors’ reports said there was “material uncertainty” about the business’s “ability to continue as a going concern.”

While it has been known that the network was under financial stress, it has never been stated in such stark terms.

In particular, the board warned the company may cease to exist if it can’t renew a loan, with experts warning that its latest multi-million dollar loss makes a takeover by Rupert Murdoch a very real prospect.

The ASX-listed company on Thursday reported a statutory loss of $232.2 million for the first half of 2016-17, mainly because the group’s accountants marked down the value of its broadcasting licence by $214.5 million.

That’s in line with heavy write-downs by its competitors, Seven and Nine.

Deadline looms

The most immediate threat is the expiry on December 23 of a $200 million revolving cash advance facility with the Commonwealth Bank. Ten’s directors admitted that if this was not renewed, it “may cast significant doubt on the group’s ability to continue as a going concern”.

The loan facility is guaranteed by three billionaire shareholders: Bruce Gordon, Gina Rinehart and James Packer.

The board said it was “reasonable” to assume they would be successful in confronting the challenges.

The market was unconvinced. The network’s shares plummeted 16 per cent to around 37 cents immediately after the result, as shareholders ran for the door, and even further to 36 cents (-19 per cent) later in the afternoon.

It was the latest in a string of losses. Network Ten was briefly profitable in the first half of 2015-16 to the tune of $13.4 million, the first time in four years. But it’s been all downhill, before and since.

News Corp circles

Peter Cox, a leading media economist, said the price plunge was a “big temptation” for News Corp to take a bigger stake, provided the government changed the so-called ‘reach rule’ restrictions on media ownership.

With Thursday’s price fall, the value of Network Ten on the share market fell to around $161 million.

“I think they want to put the touch of death on this company by them running it, which is what they in effect have been doing,” Mr Cox told The New Daily.

“There’s a lot of temptation. Rupert Murdoch has always wanted to have a broadcast channel. Now is probably not the right time in history to do it, but that’s never worried him.”

Australian Shareholders Association spokesman Allan Goldin said the result was “very sad” because the company has been working hard to turn around its financial position.

“The government should go and change the broadcasting rules. It’s really silly. These companies, through their broadcasters, are fighting against Google and Netflix and everyone else who don’t have any of these restrictions, so it’s really unfair to them,” Mr Goldin said.

Monash University’s Dr John Vaz, an expert in accounting and finance, said the company’s underlying performance were “worrying”.

“The revenue is not a bad story. It’s not that different to their competitors. But the cost of getting that revenue, the EBITDA performance, is worrying and there’s no indication this is a once-off.”

Dr Vaz said the company “could be” positioning themselves to be bought.

“It might be a way of getting access to more capital.”