Pay TV company Foxtel will pay $77m for a 15% share in the Ten Network, ending nine months of failed takeover bids from US giants including Discovery and Time Warner.
The third-ranked free-to-air TV network needed a cash injection to pay down debt and increase the budget for programming but several consortiums pulled out after details of the bids were leaked and the asking price from Ten was too high.
While Ten’s flagship show, MasterChef Australia, has improved its ratings performance markedly this year, the network has struggled to beat even the ABC in recent years and its share of advertising has been eroded by Seven and Nine.
The long-awaited deal includes Ten taking a 24.99% stake in Foxtel’s advertising business Multi Channel Network (MCN) and the option to become a 10% shareholder in Foxtel’s subscription video on-demand service Presto TV. The deal however is subject to approval by various regulatory authorities.
A local video on-demand competitor to US-owned Netflix, Presto TV is a 50-50 joint venture between Foxtel and Seven West Media.
The CEO of Network Ten, Hamish McLennan, said the announcement positioned Ten to drive long-term value for shareholders.
“The board believes the agreements with Foxtel and MCN will materially enhance Ten’s business and better equip it to respond to the challenge of the ever-changing media and advertising landscape,” McLennan said in a statement on Monday.
MCN’s 68 Foxtel pay TV channels and Ten’s three free-to-air television channels Ten, Eleven and One will now sell advertising under one banner, giving advertisers more options for integration.
MCN sells advertising for dozens of media brands including Foxtel Networks, Fox Sports, Telstra Media, Sky News, Discovery Networks, BBC Worldwide, Turner Broadcasting, NBCU, Viacom International Media Networks and Sky Racing.
McLennan said by joining forces with MCN, Ten gains economies of scale and more integration opportunities for its advertising clients.
“The combined sales operation will give advertisers a new way to reach consumers across all video content distribution platforms,” he said.
MCN CEO Anthony Fitzgerald said the agreement between MCN and Ten would create new opportunities for the media industry.
“MCN has long championed the power of television overall, and the benefits of an FTA-STV combination for advertisers and agencies and we are delighted to see this agreement come to fruition.”
Ten’s billionaire shareholders, Gina Rinehart, James Packer and Lachlan Murdoch, have presided over a period of upheaval at Ten, which has been hit hard by the changing media landscape and unstable management.
Late last year Rinehart, Australia’s richest person, quit the board of Ten after a four-year stint, citing an increased workload at her company Hancock Prospecting.
The billionaire mining magnate maintains a 10% share in Ten and is represented by her right-hand man John Klepec.
