$4bn Ten sale off the rails as admen bicker, profit falls

THE ongoing $4 billion sales process for Ten Network Holdings has hit a speed bump.

THE ongoing $4 billion sales process for Ten Network Holdings has hit a speed bump.

The company yesterday announced a first-half profit fall amid speculation about the sales department's performance.

The profit fall came as Ten chief executive Grant Blackley admitted at an analysts' briefing the company was working to "become more relevant to a wider group of advertisers".

The group yesterday reported a 12 per cent fall in net profit to $37.7 million for the six months to February 28.

A sharp 6.6 per cent rise in expenses helped drive the television operating earnings 8.7 per cent lower to $142.4 million.

It was a result that failed to enthuse senior industry figures.

Harold Mitchell, chairman of Australia's biggest media agency, Mitchell and Partners, said Ten's results were weaker than the network would have liked at a key moment.

"This is a difficult result for Ten at a time when it would be wanting a strong result," he said.

He stressed that demand for advertising on Ten had picked up since the end of Ten's reporting period in March, in a strengthening commercial television market.

"Ten is doing better, but they're all doing well."

Ten's performance in the early ratings period attracted criticism from media industry figures, who claimed the network was "failing to convert audience share into revenue share".

Mr Blackley said this year the market had in recent years "undervalued Ten in respect of share of advertising dollars".

Ten executive chairman Nick Falloon admitted television advertising was still "a reasonably tough market", but added that he saw "some signs of that picking up, off the back of the demand that may come with spending from the Government".

Mr Falloon said there was "every indication" there would be "multiple campaigns supporting a number of federal Government initiatives" leading up to the federal election later this year that would benefit Ten's revenue.

This recovery would be helped by the return of network "staples", including Big Brother.

Mr Falloon said the network would "strive to maintain" an advertising revenue share above 30 per cent of the $1.6 billion metropolitan free-to-air television advertising market.

The group recorded a 30.3 per cent share for the six months to December after plunging to 27.7 per cent during the six months to June. Despite this recovery, advertising industry figures and buyers speculated that senior members of the group's national sales team were under pressure.

They suggested that despite a recovery in revenue share in the second half of the 2006 calendar year, sales could have been better in a period that included Australian Idol and the AFL finals.

There have been continuing reports of problems in the group's advertising division, including personality clashes between senior members of the team.

An advertising industry source said there was "no question" Ten national sales director Shaun James was "under pressure".