US TV network giant CBS has stolen a march on Lachlan Murdoch and WIN owner Bruce Gordon by lodging a successful bid for the troubled Network Ten.
Network Ten’s receivers, managers and voluntary administrators have confirmed that CBS has entered into a binding agreement to buy the broadcaster’s business and assets.
The only hurdle left for CBS is gaining approval from the Foreign Investment Review Board. Steve Allen, analyst with Fusion Strategy, said that was likely been forthcoming as “regulators have shown in recent times the imperatives to keep businesses going trump other issues”.
In addition to the core channel TEN, the deal includes digital terrestrial television (DTT) channel ELEVEN, of which CBS already owns a 33 per cent stake, the DTT channel ONE and Network Ten’s digital platform, TENPLAY.
CBS will also launch CBS All Access, the company’s digital subscription video on-demand service, in the Australian market.
The company recently unveiled plans to make the service available in Canada next year.
The winning bid from CBS comes after the Australian Competition & Consumer Commission (ACCC) said it would not oppose a joint bid by media magnates Lachlan Murdoch and Bruce Gordon to buy Ten.
However, the bids from Mr Murdoch and Mr Gordon were reliant on changes to Australian media law being passed by the Senate.
The delay in the Australia’s media law reforms made CBS the preferred bidder over the Murdoch/Gordon proposal.
Ten was placed into voluntary administration in June after its billionaire creditors Mr Murdoch, Mr Gordon and James Packer backed away from guaranteeing a new $250 million line of credit, effectively holding a pistol to the head of Ten’s board, who reacted by calling in administrators.
CBS will now take over all the group’s debt, effectively recapitalising it.
“Network Ten is a prime broadcasting asset with over half a century of experience and brand equity in Australia,” Leslie Moonves, chairman and chief executive of the CBS Corporation said in a statement.
“Network Ten and CBS have enjoyed a close working relationship for nearly two decades, and now CBS will continue to provide Network Ten with access to the very best in US content.
“We also look forward to working with the outstanding team at Network Ten to enhance and expand on its great legacy of Australian news, drama, reality and sports programming,” said Armando Nunez, president and chief executive of CBS Studios International.
Administrator Jarrod Villani of KordaMentha Restructuring said operations would continue without interruption.
“The Receivers and Administrators will work closely together to ensure that operations continue uninterrupted while the transaction is finalised,” Mr Villani said in a statement.
“As part of the agreement to purchase the Network Ten business, CBS will provide immediate financial support to ensure continuity of operations ahead of the upcoming meeting of creditors.”
Mr Allen said it was unlikely programming would change. Ten is currently renegotiating content deals with CBS and Fox, a group connected to Murdoch interests. The CBS deal cements their content arrangements with Ten.
“The contract with Fox will have to be renegotiated, presumably at a lower price than the current $100 million. Fox would be unlikely to have anywhere else to go to provide that content in Australia,” Mr Allen said.
Ten fell into foreign hands after an earlier bankruptcy in the early 1990’s which saw Canada’s CanStar group grab 85 per cent equity with a special deal that gave them around 15 per cent voting rights.
– With ABC