Australia’s Network Ten has found a buyer for its outdoor advertising arm, a move that will raise A$145m (US$144m) to reduce its debts and invest in programming.
The deal will see Australian outdoor ad specialist Outdoor Media Operations (OMO) acquire Eye Corp for an initial A$125m, with another A$20m following in three years, subject to regulatory and third-party approval. Ten will retain a number of “onerous” contracts worth about A$16m.
The broadcaster’s parent Ten Network Holdings last month raised A$200m from shareholders to fend off a 70% fall in profits – to A$14.8m for the half-year to February from A$49.5m the year before – and a 10.9% drop in revenue.
It will combine those proceeds with the cash from the Eye sale and a cash facility of about A$210m due to mature next year.
“Successful completion of the transaction with OMO will be good news for Ten. It will make our balance sheet stronger by further reducing debt and will give us additional opportunity to invest in the creative renewal of Ten’s television content,” said Ten CEO James Warburton.
This comes after chief programming officer David Mott unveiled a plan to turn Ten into the “new home of entertainment” in Australia. Prior to that, head of programming Beverley McGarvey told C21 that management and structural changes last year had set up the broadcaster to move forward “in a very aggressive fashion.”
The news comes soon after Ten bought into UK second-screen app creator Zeebox for an undisclosed amount, with the pair launching an Australian subsidiary that Ten’s chief digital officer Jon Marquard called a “key part” of the broadcaster’s digital media strategy.