CBS swoops on Network Ten
CBS Corp has parlayed its position as the biggest single creditor of Australia’s struggling Network Ten to buy the third-ranked Aussie commercial broadcaster.
Ten: now owned by CBS
Simultaneously, the US studio revealed its subscription streaming service CBS All Access will launch in Australia.
The administrators of Ten Network Holdings, which has been in administration since June, opted to accept the offer from CBS over a rival bid from Ten’s billionaire shareholders Lachlan Murdoch and Bruce Gordon.
CBS has made a binding offer for the company, which includes Ten, sister channels Eleven and One, and digital platform Tenplay. CBS already owns 33% of Eleven.
Les Moonves
The deal, which is subject to Foreign Investment & Review approval, involves a refinancing of secured debt arrangements, including shareholder guarantor fees put up by Murdoch and Gordon.
The financial terms will be revealed at a second meeting of creditors, which is expected to be held on September 7. CBS will provide immediate financial support to ensure continuity of operations ahead of the meeting, where creditors will also be told how much money they can expect will be returned to them.
As part of the deal CBS, will not participate in the disbursements to creditors and the studio has guaranteed there will be no staff redundancies. Secured creditors are expected to be paid in full.
Administrators KordaMentha hopes to inform creditors of the terms and the deed of company arrangement this Thursday.
CBS chairman and CEO Leslie Moonves said the studio is acquiring a prime broadcasting asset 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.”
Armando Nuñez, president and CEO of CBS Studios International, said: “We are committed to the efficient, reliable and successful turnaround, operation and development of Ten to support continued growth in the Australian media.
Armando Nunez
“This acquisition not only presents CBS with considerable broadcasting opportunities in Australia but also allows for further multi-platform distribution and growth.”
Ten CEO Paul Anderson added: “CBS and Ten have had a strong relationship for a number of years; we are very excited about further developing that relationship with CBS as an owner and strength that they will provide to the company at this critical time.”
The Murdoch-Gordon joint bid was contingent on a suite of media reforms which have been blocked by the Australian senate.
In July, C21 reported that CBS was looking at taking an equity stake in the Aussie broadcaster in exchange for reducing the cost of its five-year output deal.
That followed revelations the US studio had lodged a claim for A$843m (US$678m) owed by Ten Network Holdings.
CBS and New York hedge fund Anchorage Capital Group were among nine parties that signed non-disclosure agreements to gain access to Ten’s information memorandum.
Ten disclosed CBS and 21st Century Fox had agreed on the vast majority of commercial terms for new content deals after the board appointed KordaMentha as voluntary administrators in June.
If concluded, the new deals would have reduced the cost of US programming by about 50% while still giving Ten access to the “best” productions of those studios over the medium term, it said. Recent CBS shows to air on Ten include Bull, Man With a Plan and Doubt.
The board was forced to act after Murdoch and Gordon refused to extend or increase an A$200m cash advance facility from the Commonwealth Bank of Australia (CBA), which expires in December.
Subsequently, the CBA appointed PPB Advisory as managers and receivers with the remit to sell or recapitalise the company.
Network Ten receiver and manager and PPB advisory partner Christopher Hill said today: “Network Ten has played a significant role in Australia’s media landscape over many decades, and the sale of the business to CBS will allow the iconic broadcaster to move into a new chapter on a strong and stable footing.”
CBS did not say when CBS All Access will launch. Ten had an option to buy a 10% stake in Presto, the streaming service co-owned by Foxtel (which owns nearly 15% of Ten) and Seven West Media, which folded last January.