The industry’s worst kept secret has this morning been officially announced. Network Ten has announced that pay TV provider Foxtel will take a 15 per cent share in the embattled free-to-air network.
In an announcement to the media this morning, Ten has also proposed to become a 24.9 per cent shareholder in Foxtel’s $500 million advertising business Multi Channel Network (MCN) who will act as a “sales representative to gain scale, create efficiencies, improve data capabilities and provide broader integration opportunities for advertisers”.
Foxtel’s plans to buy into the network would raise up to $77 million the release said. Ten also has plans to take a 10 per cent share in online video streaming service Presto which is a joint venture between Foxtel and Seven West Media.
Ten’s executive chairman and CEO, Hamish McLennan, said in the statement: “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.”
Mr McLennan added: “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. Our total prime time primary channel audience has increased 18 per cent this year.
“Our 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 us to further leverage our growing audience with enhanced scale and a broader, more targeted and efficient offering.”
Foxtel’s CEO, Richard Freudenstein, said: “We believe our proposed 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, we are confident that this proposal delivers a robust long term solution for a revitalised, competitive and profitable Ten.”
Subject to regulatory approval, Ten anticipates the issuance of new shares and board changes to be complete buy October this year.