CBS questioned MCN deal: Paul Anderson

CBS questioned why Ten had outsourced its advertising sales to MCN from “day one”, Paul Anderson has revealed.

Ten CEO Paul Anderson. Photo: Hollie Adams

CBS Corp questioned why Network Ten had outsourced its advertising sales to Multi Channel Network from “day one” of running the broadcaster, Ten chief Paul Anderson has revealed.

In an interview with The Australian, Anderson admitted that the media giant had long been pursuing plans to split with the News Corp-controlled MCN to set up its own in-house unit, much like its US operations.

This comes despite previous attempts by Anderson to quell the speculation that MCN could be ditched.

Anderson was speaking after The Australian revealed earlier today that CBS has terminated Ten’s $600 million ad sales contract with MCN to establish its own sales operation.

“CBS has always said ‘This is an unusual situation where you didn’t fully control your revenue’. They’ve said that from day one,” Anderson said.

Anderson said the decision to exit the agreement was driven by a desire to regain autonomy over ad sales, rather than performance, noting that MCN has a “strong reputation” in the Australian market for growing market share in tough trading conditions.

“This is about us controlling our own destiny. This is not about MCN. We need to be tactical, move with our audiences and monetise them. The media landscape is changing rapidly,” he said.

He said CBS’ growing ambitions in the $16 billion Australian ad market requires a traditional direct-selling approach as Ten offers more content to consumers through online alternatives such as catch-up TV service Ten Play and the soon-to-be launched streaming service CBS All Access.

“The world has changed a lot since we originally entered the agreement, and it’s a different environment now from an ownership perspective. Additionally, our audiences now consumer content differently as does the way we monetise them. We think this is the best way for us to operate going forward.”

Anderson said Ten would look to hire “in excess of 100 staff” under Rod Prosser as chief sales officer.

“It’s early days. We know it’s a big job. We’ve got a process we will work through with MCN. That will play out over the next three to four months. Having said that our aim is to have start-of-the-art systems for both television and digital platforms.

“CBS have deep experience and technology that we can share through CBS Interactive [the company’s online division]. We are thinking about things differently and trying to shape our team so that it meets the demand from the agency community and advertisers.”

MCN will receive Ten sales bookings until the end of 2018 while the two companies separate. Ten owns 24.99 per cent of MCN, with the balance held by Foxtel, which is majority-owned by The Australian’s publisher, News Corp.

Asked whether CBS is happy with Ten’s performance since it took control in November 2017 after it went into receivership, Anderson said the new owner is taking a long-term approach despite losing its prized Big Bash League media rights earlier this year to rivals Seven and Fox Sports.

“We’re only 8 months in, which is a relatively short time to get your feet under the desk. They’re incredibly supportive and deeply involved in the decisions we’re making here strategically in terms of our content.

“Investments in content over the past few months are starting to pay off. We’ve got a really strong back end of this year and a good idea of what we’re doing over summer and into the first quarter of 2019. They’re happy with the progress we’re making but we’ve got a long way to go. It’s a long game.”

Of CBS All Access, Anderson said the service is moving closer to launching in Australia after it attracted 2 million subscribers to the US service.

“We’re a fair way down the road map in terms of planning technology and content. A definitive launch date is yet to be decided.”

Anderson declined to comment on an investigation by CBS into allegations of sexual harassment against chief executive Leslie Moonves.