Rupert Murdoch’s 20th Century Fox has joined in the legal battle being waged by his son Lachlan and fellow media mogul Bruce Gordon to block the US network CBS from taking over the Ten Network.

Channel Ten may be Australia’s third-rated free-to-air network, and languishing in receivership, but its future has become a battleground between two of the world’s most powerful media companies.

Most had expected that when Ten went into receivership it would be rescued by its major shareholders, Lachlan Murdoch and Gordon. It would be refinanced, with the creditors taking a bath. What the two media moguls did not see coming was a bid from CBS which was owed $348m in program rights from the ailing network.

That set the stage for a clash of the media titans in the NSW supreme court, with the two former shareholders arguing that the administrator, KordaMentha, did not put their bid to creditors.

Andrew Bell SC, appearing for the Murdoch/Gordon interests, told the court his clients were actually the highest bidders for Ten, having offered 10% more than CBS, and their bid should have been put to the creditors.

They also accused the administrators “of poisoning the employees of Ten against the Birketu/ Illyria bid” by Murdoch and Gordon. Employees make up a large portion of the creditors.

Murdoch and Gordon also contended that CBS as the largest creditor should not be allowed to vote at the creditors’ meeting, or, if it does, its vote should be limited to $1.



The administrators said there were other factors assessed when looking at the bids, including that the Murdoch/Gordon bid had lapsed on 25 August.

They also argued that creditors would have had to wait, possibly many months, for a payout because the Murdoch/Gordon bid requires a change in Australia’s media laws. The duo already has significant media interests and would be blocked by the two-out-of-three rule, which limits owners to two of either newspapers, radio or television.



Those media changes are proving a major headache for the government, which need crossbench support to pass. But with media lobbyists thick on the ground in Canberra, each championing their particular preferred outcome, it is proving difficult to find a proposal acceptable to enough of the crossbench.

The supreme court case is set down for two days but this is likely to be only the first salvo across CBS’s bows.

CBS must also get Foreign Investment Review Board approval for its bid, and the clock is ticking. Its bid is subject to a sunset clause on 15 December.

In the relatively small and concentrated Australian media market interlopers find the going tough.

The last to try to upset the established order was Kerry Stokes. He found himself locked in one of the longest cases in legal history when he sought to secure an outlet for his C7 sports network on pay TV, a market dominated by the Murdoch-owned Foxtel. He failed in that case, but has become a major media force in Australia.