BREAKING NEWS: Channel Ten Announce Voluntary Administration
Following news yesterday that Australian TV network Channel Ten had suspended trading of its shares following news that a number of key shareholders would not guarantee the company’s future, it has now been confirmed that the company will be placed into voluntary administration.
“This is extremely disappointing for all of us,” said Ten CEO Paul Anderson in a meeting with employees earlier this morning.
Network Ten is being put into voluntary administration. “This is extremely disappointing for all of us,” says CEO. pic.twitter.com/fPcCoFQKKH
— Hugh Riminton (@hughriminton) June 14, 2017
Reports out of the Sydney Morning Herald tipping the announcement earlier this morning claim that “KordaMentha will be appointed as administrator by the company.”
Channel Ten posted a loss of $232.19 million for the recent half year period and was savaged by Credit Suise in a note that rated the company “un-investable.”
At that time, the company’s board of directors warned there was uncertainty about their ability to continue unless it was able to cut costs, renegotiate contracts with US suppliers, and secure licence fee cuts.
Whether or not voluntary administration will give them that opportunity is, at this time, uncertain.
Update: In a statement submitted to the Australian Stock Exchange, it has now been confirmed that “Mr Mark Corda, Ms Jennifer Nettleton and Mr Jarrod Villani of Korda Mentha have been appointed as voluntary administrators of the company and each of its subsidiaries.”
“The administrators have advised the company that they will work closely with management, employees, suppliers and content partners while they undertake a financial and operational assessment of the business. During this period, the Administrators intend to continue operations as much as possible on a business as usual basis.”
Network Ten said in the statement that this week’s correspondence from Illyria and Birketu “left the directors with no choice but to appoint administrators.”
“This decision comes despite the Ten Group making significant progress to realise the potential sources of improvements to future earnings identified in the Company’s Directors’ Report”.
Specifically, Ten claims it’s making headway when it comes to renegotiating its content contracts with US partners Fox and CBS. They say that “although final terms have not yet been formally agreed” the replacement agreements would reduce the company’s future liabilities for US content by approximately 50%.
They say further internal transformation initiatives are expect to see a positive impact on earnings of at least $50 million in the 2018 financial year and that “after the changes to regulations anticipated to be tabled in Parliament tomorrow pass through the Parliamentary process, the reduction in licence costs for TEN in FY17 will be in the order of $22 million and, in FY18, $12 million.”
The media reform package, announced as part of the Australian government’s May 8 budget, includes the abolition of the two-out-of-three and 75% reach rules and an overall reduction in licence fees.