There is a future for three commercial TV networks in Australia

Amid hand-wringing over the future of Ten, it is worth remembering the network was owned by foreigners before.

Can Australia support three commercial television networks, can CBS run network Ten Network profitably and can the co-operation between News Corp and Ten of recent years continue under the network of US billionaire Sumner Redstone?

I reckon the answer is yes on all three counts ... at least in time. Remember Ten was owned by foreign billionaires before and thrived. At its peak in the early noughties it was owned by Canadian Izzy Asper’s Canwest Global Communications and while No 3 in ratings and total turnover, it was the most profitable commercial network with margins better than 36c in the dollar.

These were based on low local production expenses compared with Nine and Seven and keenly priced overseas content that delivered good ratings for the price.

Ten began the century as the first local network to join the reality television phenomenon, with properties such as Big Brother and Australian Idol. Ten has even been in receivership before, in 1989, and came out stronger. But there is a big difference today. The internet, streaming services such as Netflix and Stan and the availability of billions of videos on mobile screens have hurt what was once the young person’s TV network most.

Its investors of the past decade — James Packer, Lachlan Murdoch, Bruce Gordon and Gina Rinehart — have all understood the potential upside if management could get the network right. But they have done their dough.

Rinehart, in the middle of the mining boom, regarded her acquisition of 10 per cent as a small price to pay for a political voice in the eastern states. With subsequent raisings she has probably lost about $200 million on the foray, but the network has remained what journalists have always considered the most left wing of the commercial television operators.

Its long-time political editor Paul Bongiorno took redundancy three years ago and now writes for The Saturday Paper and has a regular morning gig on Radio National Breakfast with Fran Kelly. Its most successful daily product, The Project, is politically to the left and often to the left of everything the ABC offers, apart from RN.

About the only discernible effect the presence of News Corp co-chairman Lachlan Murdoch and Rinehart on the board had on the network’s politics was the short-lived Sunday morning version of The Bolt Report, now screening 7pm weeknights on Sky News.

Political positioning aside, analyst Steve Allen says there is definitely room for three networks, provided Ten can sort out its cost base. Allen, of Fusion Strategy, says Ten is probably paying double what it should for US programming but that will work out of the system, especially under CBS, the network’s biggest creditor.

What of the argument put by News’s media competitors that the strategy of Murdoch and Gordon in tipping the network into receivership in July effectively removed any control they had over Ten’s fate and opened the door to CBS? No doubt Rupert Murdoch’s long-time US rival Redstone will have understood early that the only way his network could secure its $360m Ten liability was to buy the channel.

Redstone owns 80 per cent of National Amusements, the theatre chain which in turn controls 80 per cent of the voting shares at CBS and Viacom. His daughter Shari now wields great influence over both media giants after Redstone’s health declined markedly in recent years.

But there is a lot of hindsight in that, according to Allen. “Look, we all missed that. I did not see the CBS bid coming,” he said.

“It was blindingly obvious that Monday morning when the bid lobbed, but I did not see it coming. Even Bruce Gordon did not think of it and he should have. He negotiated on behalf of Paramount when he was boss of Paramount.”

Should consumers care who owns Ten? Well given Asper owned Ten as a Canadian the answer is probably not, although it is no doubt a shame another Australian brand has been sold offshore because of the inability of politicians to sort out rational reform of the media industry.

But ignoring the interests of the big investors — and remembering small shareholders would have done better under the rival Gordon-Murdoch bid — I can’t help feeling the relationship with Foxtel, which bought $77 million of Ten stock two years ago, still has much potential for viewers.

Foxtel’s soon to be wholly owned subsidiary, Fox Sports, has expanded ties with Ten via A-League soccer rights, international rugby union and V8 Supercars, now run by James Warburton, a former Ten CEO whose tenure coincided with the genesis of some of today’s problems.

News Corp has already acquired Sky News and was believed to be planning to offer it on a Ten secondary channel for free-to-air viewers who would have the benefited from the most professional 24-hour political news service in the country. I hope CBS continues down this road with News and Foxtel. The news and sport offerings available on pay-TV are so good it would be a pity if at least parts of those services did not get a free-to-air hearing.

Ten and Foxtel have also had some success with their advertising sales joint venture Multi Channel Network and before the receivers were called Ten chief Paul Anderson had told the market the network’s bottom line would improve by $80m next year.

Ten has been unlucky with CEOs. Grant Blackley left in 2011 after a move away from the network youth pitch built on The Simpsons and into an ill-fated hour of current affairs between 6 and 7 with George Negus. This just fluffed the ratings lead-in given by the early 5pm Ten News that captured tradies and others who arrive home from work early. Analysts regarded Blackley as a leader who spent more than a dollar for every dollar he saved.

Under Warburton, some say too much unwise local content was commissioned. Think Being Lara Bingle and The Shire.

That all turned around quickly when Hamish McLennan, now chair of News’s boom real estate venture RealEstate.com.au, arrived from the office of News Corp executive chairman Rupert Murdoch in the US. Think Big Bash cricket, Gogglebox, The Bachelor and The Bachelorette.

The future for Ten? One former TV executive thought Nine, with no debt, and Ten under CBS would thrive, but Seven, with $795.2 million in debt, might be hard pressed in years ahead.