Ten Network goes into administration after failing to win financial backing from its leading shareholders

This article is more than 3 years old

This article is more than 3 years old

The federal government is using Network Ten’s decision to go into voluntary administration to pressure Labor over planned media reforms.

The communications minister, Mitch Fifield, says the government will bring forward its media reform package on Thursday and is looking to either Labor or the Senate crossbench to pass the legislation.

“While the government has sought to progress important reforms such as the abolition of the two-out-of-three rule since March 2016, Labor’s response has been to frustrate and delay their passage,” Fifield said.

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“They have displayed a callous disregard for the impact their actions are having on an industry that desperately needs reform. Labor’s gamesmanship has limited the options for organisations like Ten.

Fifield said that the greatest threat to media diversity would be to see Australian media organisations such as Ten fail and that the changes, if they were passed, would provide media organisations with a “fighting chance”.

Ten’s chief executive Paul Anderson had been saying for more than 18 months that media law needs to be reformed.

The commercial TV lobby group Free TV also called on Labor and the minor parties to pass the broadcast and content reform package as a matter of urgency.

“This puts the opposition, Greens and Pauline Hanson’s One Nation on notice that inaction on media reform has serious consequences, Free TV chairman Harold Mitchell said.

“The responsibility for the continued decline of the local media industry will sit with those that did not support the media reform package.”

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“Outdated media ownership laws and the licence fee ‘super profits tax’ must be removed urgently. They were put in place before the internet. They are stifling the capacity of Australian media companies to compete with giant multinational media companies including Google, Facebook, Apple and Amazon.”

Labor opposes abolition of the so-called two out of three rule which limits one owner having control of television, radio and print in one market.



Michelle Rowland, Labor’s communications spokeswoman, hit back at Senator Fifield’s claim the opposition was delaying the media package reforms.

She pointed out Senator Fifield has not even released a bill, despite having announced his second attempt at media reform with great fanfare over four weeks ago.

“Two weeks ago, minister Fifield dragged every media executive to Canberra and was lauded as the industry’s Golden Boy,” she said.

“Golden Boy is yet to introduce a legislative package into parliament. Now he seeks to prey on the anxiety that will be felt by all workers at Network Ten.”



Jock Given, a professor of media and communications at Swinburne University of Technology, said the decision to place Ten in administration turned up the heat on the government’s plans.



“Even if the company is not viable as a standalone concern, it might still be a good fit for a larger media enterprise,” he said.

“But possible suitors, like News, need the rules to change as the government is proposing. Back in late 1986, Rupert Murdoch announced he was buying Herald and Weekly Times before the law actually changed.”

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In a move late on Wednesday Ten’s billionaire shareholders Bruce Gordon and Lachlan Murdoch merged their holdings in Ten ahead of what may be an eventual takeover of the network.

In a change of substantial holding notice to the ASX, Gordon’s company Birketu and Murdoch’s investment company Illyria merged their 15% and 7.5% shares in Ten.

The two billionaires now have a combined 22.5% stake in Ten, but they have yet to indicate what their next move will be.

However, any deal Gordon and Murdoch come up with will only succeed if the government passes its media reform package.

Ten Network’s decision earlier on Wednesday to go into voluntary administration was prompted by Gordon and Murdoch’s refusal to back a new finance package.



The administrators, KordaMentha, have been appointed to run the company following the decision by leading shareholders Bruce Gordon and Lachlan Murdoch not to guarantee a $250m finance package.

KordaMentha will run the TV network “as much as possible on a business-as-usual basis”, Ten said in a statement to the Australian stock exchange.

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It said the decision by its shareholders had left the company with “no choice” but to go into administration.

The administrators will now examine a potential sale of Ten as an option, alongside securing new financing to replace the current $200m package which expires in December.

Despite recent success at the Logies and the popularity of the Big Bash cricket coverage, Ten posted a disastrous half-year loss of $232m in April and warned that its future as a “going concern” was in doubt.

Trading in Ten’s shares was suspended after being placed in a trading halt on Tuesday. The stock last traded at an all-time low of 16 cents – well below the $1.06 it has averaged over the past 12 months and a world away from the levels around $33 it held in 2005.

In addition to the 22.5% share of Ten owned by Gordon and Murdoch, Foxtel has a 13.8% stake, while mining magnate Gina Rinehart holds 8.5% and James Packer controls 7.7%.

Ten’s current board includes Foxtel boss Peter Tonagh, WIN TV chief executive Andrew Lancaster, and former Liberal MP Andrew Robb, who represents Rinehart’s interests.

Given said Ten faced a similar crisis in the early 1990s following the recession and was rescued from receivership by Canadian company CanWest.

Before the advent of multi-channeling Ten’s focus on the 16-39 year old market was successful and it enjoyed healthy audiences and revenue with Big Brother, Australian Idol, Neighbours, The Simpsons and a popular low-cost news service at 5pm. But that all changed when the audience splintered with the advent of more free channels, the internet and subscription television.