Beleaguered broadcaster Channel Ten has this morning announced a 2.5 per cent decline in revenue to $340 million taking the loss for the first half of 2016-17 to $232 million, with some even questioning if the broadcaster can survive.
The problem for Ten was an an impairment on its television licence which blew the loss out from $2.4 million to $232 million.
The loss was in line with a profit warning issued by management in February.
It has been reported that the shortfalls have had to be made up by the network’s major shareholders including billionaires Bruce Gordon, Gina Rinehart and James Packer, as well as stakeholder Foxtel and News’ Lachlan Murdoch.
The broadcaster has a $200 million loan facility with the Commonwealth Bank which is guaranteed by its billionaire shareholders. However, that’s due to expire in December this year and there’s no guarantee that will continue, putting the network’s future under a real cloud.
In February, Ten’s CEO Paul Anderson said the free-to-air TV business was under “under severe duress” borne from a tepid ad market, rising costs at the network and hefty license fees.
Auditors PricewaterhouseCoopers noted Ten is trying to secure new funding and said in a recent report: “The consolidated entity is reliant on the provision of sufficient further guarantees by shareholder guarantors and/or new financiers.
“These conditions, along with other matters set forth…indicate that a material uncertainty exists that may cast significant doubt on the consolidated entity’s ability to continue as a going concern.”
The broadcaster said a 2.7 per cent metropolitan ad market share gain had not been enough to offset the weak conditions in the ad market and the increased costs of making content. This was “not enough to offset the weak conditions in the television advertising market and the Company’s increased content and other costs,” Anderson said this morning.
The network has placed its faith in the reality genre in recent times with shows such as MasterChef, The Bachelor, The Bachelorette, Survivor and I’m A Celebrity Get Me Out Of Here the staple of its programming.
However, MasterChef aside, most of the programs have seen diminished audience numbers in recent times culminating in the disaster that was this year’s The Biggest Loser that had to be dropped from its prime time slot as audiences fell below 250,000.
“Ten has commenced a transformation program to improve all aspects of the business,” Anderson said.