Reports that US cable giant Discovery and Foxtel are eyeing a takeover of Network Ten is sparking speculation that a $1 billion plus advertising sales juggernaut could finally hit the market.
Amidst swirling rumours over the past few weeks, Ten Network told the Australian Securities Exchange this morning that Citi had been appointed to run a “range of strategic options for the company”.
While it noted that no deal had been tied up yet, this morning's Australian Financial Review ran a piece that Foxtel and US cable giant Discovery Communications were lining up a bid for the ailing network, prompting the on-market response.
The paper said should the deal come off, Foxtel would have a 14.9% stake in Ten but what is unclear at this stage is whether the deal would throw up a combined sales force, something which has been mooted between the two TV broadcasters for more than a year.
MEC's chief investment officer Sebastian Rennie told AdNews this morning that a combined sales team would create efficiencies across both networks.
“It's certainly an interesting proposition for us to be able to access the FTA and pay TV side within the same group,” he said.
“I know Seven West did a deal with ESPN, but this would be the biggest opportunity for cross-selling, and that would create something we'd be keen to look at in finer detail.”
Other sources indicated that should the move come off, it could be the first move in a wider tie-up between News Corp and a free-to-air network, while others speculated that Foxports content could make its way onto Ten as a way to improve its flagging ratings.
With Ten having about $600 million in advertising sales and Foxtel having a similar pool, any coming together of the sales teams at the two networks would create cross-selling opportunities between the groups. News Corp, Foxtel, and Network Ten are already doing cross-platform ad alliances with major advertisers.
While the new combined sales offering would not be the largest in the market – SevenWest Media holds that crown - it would afford Network Ten in particular a scale play as it attempts to turn around its advertising share performance.
Such a move may also give Network Ten a look-in at programmatic trading, and this would mean it would be the first commercial network to play in the space.
Last week Foxtel's MCN announced a tie-up with AOL-owned Adap.tv to launch the world's first private programmatic trading platform to trade both online video and linear broadcast inventory.
“You'd think as part of that deal MCN would look to bring some Ten inventory into the landmark platform, and that would create an interesting opportunity around trading FTA on that platform...although it's only going to be pockets of the inventory in the early stages,” Rennie said.
“The reality is no-one is trading linear TV and IP-delivered video together. They’re trading IPTV and online video together, but not linear television – where the majority of audience viewing remains and the majority of revenue is still traded,” MCN's group sales and marketing director Mark Frain said.
“What you’re still lacking in this market is an abundance of premium online video.”
However while the Discovery-Foxtel bid is thought to be in the final due diligence stage, Network Ten insisted there was no guarantee of a transaction eventuating.
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