Ten Network Posts $264.4 Million Half Year Loss, Blames Red Tape For Loss

Embattled telly network Channel Ten has this morning announced a bigger than expected loss in the first six months to February 28.

The struggling free-to-air-station was $264.387 million in the red for the first half of the year, a further widening of the previous half-year’s $7.983 million.

Ten’s boss Hamish McLennan said the result was to be expected after the station invested heavily in reducing costs and new programs.

McLennan was reported this morning as saying the “two-out-of-three” rule and the audience “reach” rule were hurting local media companies who now had to compete with local and overseas streaming services such as Netflix.

The worse than expected results will only fuel speculation that Foxtel is planning a move to take a large stake in the station. Yesterday Seven West Media announced it would tap the market for $612 million meaning it may throw its hat in the ring, too.

In a presentation sent to media, the station outlined its concerns which included:

The strategic review process continues and may or may not result in a transaction which is acceptable to TEN
TEN welcomes a review of the television licence fee
Government needs to urgently consider proposals to reform media ownership rules
Television ad market remains short in terms of forward bookings
Continuing to find new ways for advertisers to deepen engagement with viewers

McLennan was particularly scathing of the license fees the commercial stations were forced to pay.

“Australia’s licence fee regime remains by far the most punitive in the world,” Mr McLennan said.

“Paying licence fees on top of corporate tax and increasingly onerous Australian content obligations is unreasonable.”

McLennan said the TV advertising environment was also troublesome at present with forward bookings looking onerous and the entire market difficult to predict. Fairfax Media has this morning reported that if the ad spend deteriorates further for Ten it has warned investors that it will need to recapitalise.

On a brighter note for Ten, its audience numbers for 2015 had been the best they’d been since 2012. Shows such as I’m a Celebrity Get Me Out Of Here and Family Feud rating well for the station.

“Since the start of the 2015 ratings year on February 8, Network Ten is the only commercial network to increase its 25 to 54s and total people audiences, with growth of 25 per cent in 25 to 54s and 22 per cent in total people,” he said.

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