Comment: Murdoch scores own-goal on Ten Network
In terms of corporate strategic cock-ups the Murdochs must be in the running for this year’s very first prize for their failed attempt to snare ownership of Ten Network.
The Murdochs have comprehensively shot themselves in the foot or in sports parlance – scored an own-goal.
Not only did they get hammered to the post for Ten by US Network giant CBS but in so doing they opened the door to a brand fresh well-resourced competitor for their Foxtel pay network in Australia – as CBS announced it would now launch its movie streaming service CBS All Access.
Had Lachlan Murdoch (as flagbearer for the family on this occasion) and his fellow Ten shareholder Bruce Gordon, waited for the media laws to switch there may have been a very different outcome as they could have taken clean ownership.
© David Paul Morris Rupert Murdoch with son Lachlan Murdoch. Until earlier this year the Murdochs had a very rock-hard stranglehold on Ten – Lachlan wielded more than seven per cent of the shares directly, Murdoch-controlled Foxtel had around fifteen per cent and with their allies Bruce Gordon (14.9 per cent) and James Packer (7 per cent) they had the share register packaged up.
The troika of Murdoch, Packer and Gordon were also guarantors on a $200 million Commonwealth Bank loan to Ten.
And Rupert Murdoch’s US programmer Fox was one of Ten’s largest program suppliers. It was an onerous and expensive supply contract that Ten was despairingly attempting to renegotiate in order to reduce its cost base and get business back on a commercial footing.
Additionally the Foxtel-controlled company MCN was enmeshed in the operations of Ten as it had the contract to sell the advertising.
The Murdochs and their friends had all the bases covered.
That all switched over a weekend in June. Out of nowhere Murdoch and Gordon informed Ten management that they would no longer ensure the company’s debt and warned the directors that they would thus be liable if the network continued to trade under the cloud of potentially insolvency.
Directors had little option but to bring in administrators. Gordon and Murdoch clearly believed they had enough cards in their forearms to convert the debt, they had assured, into equity and get control of Ten on the cheap.
They mistakenly relied on the fact that the mooted media ownership laws switches were in the bag and they would be legally able to pick up the network while in the palms of administrators. It was to be a executed with militaristic precision – a bloodless coup.
But they didn’t count on Pauline Hanson and the rest of the colourful crossbench not to mention a citizenship crisis.
Moving too early was only one mistake.
In pushing the Ten Network into administration the Murdoch/Gordon team made an identically fatal strategic error.
Until this point Murdoch and Gordon held the advantage – because they held the equity. Once the administrators were appointed it was open season. The administrators were then compelled to put the business on the auction block, open up its books to all comers and engage in a bidding process.
(When the shares were still trading Murdoch and Gordon could have launched a takeover suggest – it would have had needed to be structured in a complicated way with non-voting securities. But it was very likely doable.)
Once the administrators had placed Ten on the block – others began to sniff around. In particular CBS which was also a large program supplier and was owed hundreds of millions by Ten, had entered the data room. It had another connection with Ten in that it was one-third possessor of one of its digital programs – Eleven.
© James Alcock Mark Korda addressed media at the very first meeting of Network Ten creditors. There had been slew of media discussion about private equity rival bidders but almost no talk of CBS – which as a creditor and a program supplier – also had slew of leverage and slew of skin in the game.
From the detail of the deal announced on Monday we know that CBS will take care of the $200 million in Ten’s debt owed to the Commonwealth Bank and the $140 million owed to Murdoch, Packer and Gordon for guarantor fees. The purchase price will also include forgiveness of what the administrators estimate is a $300 million owed by Ten to CBS for program liabilities. It will also honour staff entitlements.
A rough estimate says CBS will be paying the equivalent of $600 million or more for Ten.
But how much Fox will recover from what it was owed by Ten is not clear. It’s unlikely to be anything like one hundred cents in the dollar. That’s just another bit of the collateral harm that the Murdoch empire will suffer thanks to the decision to put Ten into administration.
At this early stage it is not clear how this compares with Murdoch/ Gordon’s suggest. But one thing is for sure. The CBS deal will not require a switch in legislation (albeit it will need Foreign Investment Review Board approval).
From the perspective of the administrators and receivers this is a better bet than attempting to 2nd guess Pauline Hanson’s next stir. (Recall this is the person who wore a burqa into Parliament a duo of weeks back.)
All that’s left now is to see whether the Murdoch/Gordon camp attempt some kind of legal activity to block the sale of Ten to CBS – this must be a possibility.
And last but not least investors can observe the fallout for the Ten’s free to air competitors – Seven West Media and Nine Entertainment.
Having a financially crippled Ten has suited them well. Shares in Nine in particular were bid up on the back of the Ten’s troubles. But Nine shares have fallen on Monday in response to of the proposed sale of Ten while Seven West Network stock has risen.
This possibly reflects the fact that Nine’s movie streaming business, STAN, which it part-owns with Fairfax Media, sources significant content from CBS – which as mentioned earlier is about to launch its own service into Australia.
Rupert Murdoch: A brief history of News Corporation
Comment: Murdoch scores own-goal on Ten Network
Comment: Murdoch scores own-goal on Ten Network
In terms of corporate strategic cock-ups the Murdochs must be in the running for this year’s very first prize for their failed attempt to snare ownership of Ten Network.
The Murdochs have comprehensively shot themselves in the foot or in sports parlance – scored an own-goal.
Not only did they get hammered to the post for Ten by US Network giant CBS but in so doing they opened the door to a brand fresh well-resourced competitor for their Foxtel pay network in Australia – as CBS announced it would now launch its movie streaming service CBS All Access.
Had Lachlan Murdoch (as flagbearer for the family on this occasion) and his fellow Ten shareholder Bruce Gordon, waited for the media laws to switch there may have been a very different outcome as they could have taken clean ownership.
© David Paul Morris Rupert Murdoch with son Lachlan Murdoch. Until earlier this year the Murdochs had a very rigid stranglehold on Ten – Lachlan wielded more than seven per cent of the shares directly, Murdoch-controlled Foxtel had around fifteen per cent and with their allies Bruce Gordon (14.9 per cent) and James Packer (7 per cent) they had the share register packaged up.
The troika of Murdoch, Packer and Gordon were also guarantors on a $200 million Commonwealth Bank loan to Ten.
And Rupert Murdoch’s US programmer Fox was one of Ten’s largest program suppliers. It was an onerous and expensive supply contract that Ten was despairingly attempting to renegotiate in order to reduce its cost base and get business back on a commercial footing.
Additionally the Foxtel-controlled company MCN was enmeshed in the operations of Ten as it had the contract to sell the advertising.
The Murdochs and their friends had all the bases covered.
That all switched over a weekend in June. Out of nowhere Murdoch and Gordon informed Ten management that they would no longer ensure the company’s debt and warned the directors that they would thus be liable if the network continued to trade under the cloud of potentially insolvency.
Directors had little option but to bring in administrators. Gordon and Murdoch clearly believed they had enough cards in their mitts to convert the debt, they had ensured, into equity and get control of Ten on the cheap.
They mistakenly relied on the fact that the mooted media ownership laws switches were in the bag and they would be legally able to pick up the network while in the mitts of administrators. It was to be a executed with militaristic precision – a bloodless coup.
But they didn’t count on Pauline Hanson and the rest of the colourful crossbench not to mention a citizenship crisis.
Moving too early was only one mistake.
In pushing the Ten Network into administration the Murdoch/Gordon team made an identically fatal strategic error.
Until this point Murdoch and Gordon held the advantage – because they held the equity. Once the administrators were appointed it was open season. The administrators were then compelled to put the business on the auction block, open up its books to all comers and engage in a bidding process.
(When the shares were still trading Murdoch and Gordon could have launched a takeover suggest – it would have had needed to be structured in a sophisticated way with non-voting securities. But it was very likely doable.)
Once the administrators had placed Ten on the block – others began to sniff around. In particular CBS which was also a large program supplier and was owed hundreds of millions by Ten, had entered the data room. It had another connection with Ten in that it was one-third proprietor of one of its digital programs – Eleven.
© James Alcock Mark Korda addressed media at the very first meeting of Network Ten creditors. There had been slew of media discussion about private equity rival bidders but almost no talk of CBS – which as a creditor and a program supplier – also had slew of leverage and slew of skin in the game.
From the detail of the deal announced on Monday we know that CBS will take care of the $200 million in Ten’s debt owed to the Commonwealth Bank and the $140 million owed to Murdoch, Packer and Gordon for guarantor fees. The purchase price will also include forgiveness of what the administrators estimate is a $300 million owed by Ten to CBS for program liabilities. It will also honour staff entitlements.
A rough estimate says CBS will be paying the equivalent of $600 million or more for Ten.
But how much Fox will recover from what it was owed by Ten is not clear. It’s unlikely to be anything like one hundred cents in the dollar. That’s just another bit of the collateral harm that the Murdoch empire will suffer thanks to the decision to put Ten into administration.
At this early stage it is not clear how this compares with Murdoch/ Gordon’s suggest. But one thing is for sure. The CBS deal will not require a switch in legislation (albeit it will need Foreign Investment Review Board approval).
From the perspective of the administrators and receivers this is a better bet than attempting to 2nd guess Pauline Hanson’s next budge. (Recall this is the person who wore a burqa into Parliament a duo of weeks back.)
All that’s left now is to see whether the Murdoch/Gordon camp attempt some kind of legal activity to block the sale of Ten to CBS – this must be a possibility.
And last but not least investors can observe the fallout for the Ten’s free to air competitors – Seven West Media and Nine Entertainment.
Having a financially crippled Ten has suited them well. Shares in Nine in particular were bid up on the back of the Ten’s troubles. But Nine shares have fallen on Monday in response to of the proposed sale of Ten while Seven West Network stock has risen.
This possibly reflects the fact that Nine’s movie streaming business, STAN, which it part-owns with Fairfax Media, sources significant content from CBS – which as mentioned earlier is about to launch its own service into Australia.
Rupert Murdoch: A brief history of News Corporation
Comment: Murdoch scores own-goal on Ten Network
Comment: Murdoch scores own-goal on Ten Network
SA authorities issue dire bushfire season warning
An eighth person has died from the flu
Two Sydney guys charged over $11m meth haul
Shopping centre attack
South Korea thrusts for redeployment of US weapons to the Korean peninsula
High Court challenge underway to block postal vote
Police upgrade charges over breast surgery death
Blazes and blizzards set to cause mayhem in NSW
In terms of corporate strategic cock-ups the Murdochs must be in the running for this year’s very first prize for their failed attempt to snare ownership of Ten Network.
The Murdochs have comprehensively shot themselves in the foot or in sports parlance – scored an own-goal.
Not only did they get hammered to the post for Ten by US Network giant CBS but in so doing they opened the door to a brand fresh well-resourced competitor for their Foxtel pay network in Australia – as CBS announced it would now launch its movie streaming service CBS All Access.
Had Lachlan Murdoch (as flagbearer for the family on this occasion) and his fellow Ten shareholder Bruce Gordon, waited for the media laws to switch there may have been a very different outcome as they could have taken clean ownership.
© David Paul Morris Rupert Murdoch with son Lachlan Murdoch. Until earlier this year the Murdochs had a very rock-hard stranglehold on Ten – Lachlan wielded more than seven per cent of the shares directly, Murdoch-controlled Foxtel had around fifteen per cent and with their allies Bruce Gordon (14.9 per cent) and James Packer (7 per cent) they had the share register packaged up.
The troika of Murdoch, Packer and Gordon were also guarantors on a $200 million Commonwealth Bank loan to Ten.
And Rupert Murdoch’s US programmer Fox was one of Ten’s largest program suppliers. It was an onerous and expensive supply contract that Ten was despairingly attempting to renegotiate in order to reduce its cost base and get business back on a commercial footing.
Additionally the Foxtel-controlled company MCN was enmeshed in the operations of Ten as it had the contract to sell the advertising.
The Murdochs and their friends had all the bases covered.
That all switched over a weekend in June. Out of nowhere Murdoch and Gordon informed Ten management that they would no longer ensure the company’s debt and warned the directors that they would thus be liable if the network continued to trade under the cloud of potentially insolvency.
Directors had little option but to bring in administrators. Gordon and Murdoch clearly believed they had enough cards in their mitts to convert the debt, they had assured, into equity and get control of Ten on the cheap.
They mistakenly relied on the fact that the mooted media ownership laws switches were in the bag and they would be legally able to pick up the network while in the mitts of administrators. It was to be a executed with militaristic precision – a bloodless coup.
But they didn’t count on Pauline Hanson and the rest of the colourful crossbench not to mention a citizenship crisis.
Moving too early was only one mistake.
In pushing the Ten Network into administration the Murdoch/Gordon team made an identically fatal strategic error.
Until this point Murdoch and Gordon held the advantage – because they held the equity. Once the administrators were appointed it was open season. The administrators were then compelled to put the business on the auction block, open up its books to all comers and engage in a bidding process.
(When the shares were still trading Murdoch and Gordon could have launched a takeover suggest – it would have had needed to be structured in a elaborate way with non-voting securities. But it was very likely doable.)
Once the administrators had placed Ten on the block – others began to sniff around. In particular CBS which was also a large program supplier and was owed hundreds of millions by Ten, had entered the data room. It had another connection with Ten in that it was one-third possessor of one of its digital programs – Eleven.
© James Alcock Mark Korda addressed media at the very first meeting of Network Ten creditors. There had been slew of media discussion about private equity rival bidders but almost no talk of CBS – which as a creditor and a program supplier – also had slew of leverage and slew of skin in the game.
From the detail of the deal announced on Monday we know that CBS will take care of the $200 million in Ten’s debt owed to the Commonwealth Bank and the $140 million owed to Murdoch, Packer and Gordon for guarantor fees. The purchase price will also include forgiveness of what the administrators estimate is a $300 million owed by Ten to CBS for program liabilities. It will also honour staff entitlements.
A rough estimate says CBS will be paying the equivalent of $600 million or more for Ten.
But how much Fox will recover from what it was owed by Ten is not clear. It’s unlikely to be anything like one hundred cents in the dollar. That’s just another bit of the collateral harm that the Murdoch empire will suffer thanks to the decision to put Ten into administration.
At this early stage it is not clear how this compares with Murdoch/ Gordon’s suggest. But one thing is for sure. The CBS deal will not require a switch in legislation (albeit it will need Foreign Investment Review Board approval).
From the perspective of the administrators and receivers this is a better bet than attempting to 2nd guess Pauline Hanson’s next stir. (Recall this is the person who wore a burqa into Parliament a duo of weeks back.)
All that’s left now is to see whether the Murdoch/Gordon camp attempt some kind of legal activity to block the sale of Ten to CBS – this must be a possibility.
And last but not least investors can observe the fallout for the Ten’s free to air competitors – Seven West Media and Nine Entertainment.
Having a financially crippled Ten has suited them well. Shares in Nine in particular were bid up on the back of the Ten’s troubles. But Nine shares have fallen on Monday in response to of the proposed sale of Ten while Seven West Network stock has risen.
This possibly reflects the fact that Nine’s movie streaming business, STAN, which it part-owns with Fairfax Media, sources significant content from CBS – which as mentioned earlier is about to launch its own service into Australia.
Rupert Murdoch: A brief history of News Corporation
Comment: Murdoch scores own-goal on Ten Network
Comment: Murdoch scores own-goal on Ten Network
SA authorities issue dire bushfire season warning
An eighth person has died from the flu
Two Sydney guys charged over $11m meth haul
Shopping centre attack
South Korea shoves for redeployment of US weapons to the Korean peninsula
High Court challenge underway to block postal vote
Police upgrade charges over breast surgery death
Blazes and blizzards set to cause mayhem in NSW
In terms of corporate strategic cock-ups the Murdochs must be in the running for this year’s very first prize for their failed attempt to snare ownership of Ten Network.
The Murdochs have comprehensively shot themselves in the foot or in sports parlance – scored an own-goal.
Not only did they get hammered to the post for Ten by US Network giant CBS but in so doing they opened the door to a brand fresh well-resourced competitor for their Foxtel pay network in Australia – as CBS announced it would now launch its movie streaming service CBS All Access.
Had Lachlan Murdoch (as flagbearer for the family on this occasion) and his fellow Ten shareholder Bruce Gordon, waited for the media laws to switch there may have been a very different outcome as they could have taken clean ownership.
© David Paul Morris Rupert Murdoch with son Lachlan Murdoch. Until earlier this year the Murdochs had a very stiff stranglehold on Ten – Lachlan possessed more than seven per cent of the shares directly, Murdoch-controlled Foxtel had around fifteen per cent and with their allies Bruce Gordon (14.9 per cent) and James Packer (7 per cent) they had the share register packaged up.
The troika of Murdoch, Packer and Gordon were also guarantors on a $200 million Commonwealth Bank loan to Ten.
And Rupert Murdoch’s US programmer Fox was one of Ten’s largest program suppliers. It was an onerous and expensive supply contract that Ten was despairingly attempting to renegotiate in order to reduce its cost base and get business back on a commercial footing.
Additionally the Foxtel-controlled company MCN was enmeshed in the operations of Ten as it had the contract to sell the advertising.
The Murdochs and their friends had all the bases covered.
That all switched over a weekend in June. Out of nowhere Murdoch and Gordon informed Ten management that they would no longer assure the company’s debt and warned the directors that they would thus be liable if the network continued to trade under the cloud of potentially insolvency.
Directors had little option but to bring in administrators. Gordon and Murdoch clearly believed they had enough cards in their palms to convert the debt, they had assured, into equity and get control of Ten on the cheap.
They mistakenly relied on the fact that the mooted media ownership laws switches were in the bag and they would be legally able to pick up the network while in the forearms of administrators. It was to be a executed with militaristic precision – a bloodless coup.
But they didn’t count on Pauline Hanson and the rest of the colourful crossbench not to mention a citizenship crisis.
Moving too early was only one mistake.
In pushing the Ten Network into administration the Murdoch/Gordon team made an identically fatal strategic error.
Until this point Murdoch and Gordon held the advantage – because they held the equity. Once the administrators were appointed it was open season. The administrators were then compelled to put the business on the auction block, open up its books to all comers and engage in a bidding process.
(When the shares were still trading Murdoch and Gordon could have launched a takeover suggest – it would have had needed to be structured in a elaborate way with non-voting securities. But it was most likely doable.)
Once the administrators had placed Ten on the block – others began to sniff around. In particular CBS which was also a large program supplier and was owed hundreds of millions by Ten, had entered the data room. It had another connection with Ten in that it was one-third proprietor of one of its digital programs – Eleven.
© James Alcock Mark Korda addressed media at the very first meeting of Network Ten creditors. There had been slew of media discussion about private equity rival bidders but almost no talk of CBS – which as a creditor and a program supplier – also had slew of leverage and slew of skin in the game.
From the detail of the deal announced on Monday we know that CBS will take care of the $200 million in Ten’s debt owed to the Commonwealth Bank and the $140 million owed to Murdoch, Packer and Gordon for guarantor fees. The purchase price will also include forgiveness of what the administrators estimate is a $300 million owed by Ten to CBS for program liabilities. It will also honour staff entitlements.
A rough estimate says CBS will be paying the equivalent of $600 million or more for Ten.
But how much Fox will recover from what it was owed by Ten is not clear. It’s unlikely to be anything like one hundred cents in the dollar. That’s just another bit of the collateral harm that the Murdoch empire will bear thanks to the decision to put Ten into administration.
At this early stage it is not clear how this compares with Murdoch/ Gordon’s suggest. But one thing is for sure. The CBS deal will not require a switch in legislation (albeit it will need Foreign Investment Review Board approval).
From the perspective of the administrators and receivers this is a better bet than attempting to 2nd guess Pauline Hanson’s next stir. (Reminisce this is the person who wore a burqa into Parliament a duo of weeks back.)
All that’s left now is to see whether the Murdoch/Gordon camp attempt some kind of legal act to block the sale of Ten to CBS – this must be a possibility.
And last but not least investors can observe the fallout for the Ten’s free to air competitors – Seven West Media and Nine Entertainment.
Having a financially crippled Ten has suited them well. Shares in Nine in particular were bid up on the back of the Ten’s troubles. But Nine shares have fallen on Monday in response to of the proposed sale of Ten while Seven West Network stock has risen.
This possibly reflects the fact that Nine’s movie streaming business, STAN, which it part-owns with Fairfax Media, sources significant content from CBS – which as mentioned earlier is about to launch its own service into Australia.
Rupert Murdoch: A brief history of News Corporation