Media shuffle is coming
The fate of Channel Nine’s rival the 10 network hangs in the balance with the company surviving right now only because of personal guarantees given by three prominent Australians Lachlan Murdoch James Packer and Win TV Boss Bruce Gordon. Now should state the blinding obvious here, this network 9 has been in this same predicament after CBC Asia-Pacific paid too much to James Packer. The debt became unsustainable the business teetered on the brink of receivership until a deal was done with creditors. The business then was successfully floated back onto the stock exchange. Tens fate similarly seems to be in the hands of those who hold the debt and that’s oddly not the Commonwealth Bank that gave debt of ten and two hundred million dollar line of credit. It’s Packer Murdoch and Gordon. That a Commonwealth Bank insisted provide a guarantee – so all of that line of credit can’t be refinanced then. Even the CEO Paul Anderson says administrators aren’t far away. But the question is whether the big shareholders will continue their guarantee over a company that’s losing money.
Packer for one is consolidating his interests noting sale of shares in the rat-pack movie production business just last week. Now what could happen to Ten is similar to what happened to nine. The shareholders get burnt and already the shares are fallen from a $1.45 in October last year to just 36 cents. So if the company went broke shareholders get nothing and control moves to those who own the debt. They refinance and move on like Nine. But Lachlan Murdoch is the CEO of News Ltd so that raises issues and the media ownership rules. News remember owns 50% of Foxtel and all of Sky News – so a News Ten combination could cut costs and make the buying of sports rights more viable. But all that though depends on changes to media rules that the government keeps putting on the back burner and 10 says it will keep losing money unless government cuts license fees that commercial broadcasters pay.
Let’s go now to the market this morning and what we can see is you’ve got the dollar seventy four point six seven US cents a touch lower and just under 70 euro cents as well on commodity markets the oil price down $49 23 u.s. a barrel the Dow Jones index of us shares has closed up by six points Our market here yesterday the All Ordinaries Index it was well it was actually up by seven points.
Karl Lisa – Ten, it’s fight is hanging in the balance.
Source: ACA Money Minute/Ross Greenwood