Foxtel has invested $77 million in Network Ten, giving it a 15% stake in the free to air network.
Network Ten has today revealed that is has entered into a agreements with both Foxtel and The Multi Channel Network (MCN) which sees Foxtel take no more than a 15% stake in the network and Ten take a 24.99% equity stake in MCN.
The deal also sees MCN and Ten enter into a long-term agreement that will see MCN represent Ten’s television, catch-up and digital advertising sales.
In addition, Ten will have an option for two years to become at 10% shareholder in Presto - a SVOD service owned by Seven West Media and Foxtel.
The proposed issue of new shares to Foxtel has raised up to $77 million at $0.15 per share. The deal puts to end months of speculation surrounding who would get involved with the embattled network.
Ten's executive chairman and chief executive officer, Hamish McLennan, said: “Today's announcement represents an important milestone for Ten and the conclusion of the strategic review process initiated by the board last year. It positions 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 challenges of the ever-changing media and advertising landscape.
“We welcome Foxtel’s proposed investment and we are confident this proposal will drive value for all of Ten’s shareholders.
“By joining forces with MCN, Ten will gain new efficiencies, improved data capability and provide broader integration opportunities for its advertising clients,” he said.
“The combined sales operation will provide advertisers a new way to reach consumers across all video content distribution platforms.”
McLennan said: “Ten’s ratings and revenue performance has materially improved this year as a result of a clear focus on our core audience of people aged 25 to 54, and a disciplined and selective investment in content. In total prime time primary channel audience has increased 18% this year.
He said that chief sales officer, Louise Barrett, and her team have done an outstanding job growing Ten’s revenue base, capitalising on much improved audience numbers. The advertising sales representation arrangement with MCN is a "step change" and will enable Ten to further leverage its growing audience "with enhanced scale and a broader, more targeted and efficient offering.”
It is not yet clear what will happen to Ten's already established sales team.
Foxtel’s chief executive officer, Richard Freudenstein, said, “We believe our investment in Ten is a win-win for Ten and Foxtel. With Foxtel’s local knowledge and expertise, and MCN delivering synergies and improved advertiser access, this proposal delivers the best long-term solution for a revitalised, competitive and profitable Ten.”
Each of the proposals, other than the sales representation agreement, is subject to regulatory clearances including by the ACCC.
More to come.
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