Ten Network bought by US network CBS

US network CBS is to purchase Ten Network, after Lachlan Murdoch and Bruce Gordon appeared close to a deal.

Ten Network has been sold to US network CBS.

US network CBS is to purchase Ten Network, receivers PPB Advisory and insolvency specialist KordaMentha have announced.

A statement to the New York Stock Exchange confirmed CBS Corporation has entered into a binding transaction document to acquire the business and assets of Ten.

The deal means Lachlan Murdoch and Bruce Gordon have been unsuccessful in their attempt to take control of Ten and take it private. It’s understood they were close to clinching a deal over the weekend.

CBS is currently a key content provider to Ten and operates the CBS Television Network and cable networks among other assets.
CBS said it will launch CBS All Access, the company’s subscription streaming service in the Australian market, which has beefed up dramatically in the past year.

The platform offers live station feeds, full current seasons of shows like NCIS, and last year a new edition of Star Trek was greenlit for the platform.

The deal will be funded by a refinancing of existing secured debt arrangements including shareholder guarantor fees in full and a Deed of Company Arrangement that will be put to creditors at the second creditors meeting, a statement said.

The deal will also be subject to Foreign Investment Review Board approval. Further details will be released in the coming days.

Leslie Moonves, chairman and CEO of CBS, said: “Ten is a prime broadcasting asset with over half a century of experience and brand equity in Australia.

“We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar.”

Leslie Moonves

Armando Nuñez, President and CEO of CBS Studios International, added: “Network Ten and CBS have enjoyed a close working relationship for nearly two decades, and now CBS will continue to provide Network Ten with access to the very best in US content.

“We also look forward to working with the outstanding team at Network Ten to enhance and expand on its great legacy of Australian news, drama, reality and sports programming.

“This acquisition not only presents CBS with considerable broadcasting opportunities in Australia, but also allows for further multi-platform distribution and growth.”

US hedge funds Oaktree and Anchorage Capital also bid for Ten, which broadcasts shows such as Survivor, Master Chef, The Project and I’m a Celebrity Get Me Out Of Here.

Christopher Hill, Ten Receiver and PPB Advisory Partner, said: “Network Ten has played a significant role in Australia’s media landscape over many decades, and the sale of the business to CBS will allow the iconic broadcaster to move into a new chapter on a strong and stable footing.”

KordaMentha Restructuring administrator Jarrod Villani, said: “The receivers and administrators will work closely together to ensure that operations continue uninterrupted while the transaction is finalised.

“As part of the agreement to purchase the Network Ten business, CBS will provide immediate financial support to ensure continuity of operations ahead of the upcoming meeting of creditors.”

While it had been reported that CBS was in Ten’s data room, insiders assumed it gained access to protect its own interests rather than bid for the broadcaster.

It’s understood CBS has the largest claim as an unsecured creditor at an estimated $800 million. A successful takeover would secure this revenue for the future.

Programming contracts between Ten and CBS and Fox Studios have been a point of contention, with both parties in line to be paid after the Commonwealth Bank of Australia as well as the guarantors of the loan: Mr Murdoch, Mr Gordon and James Packer.

Labor leader Bill Shorten said the deal meant the government should now forget about its media reform package, which have stalled.

Labor is against reform legislation because it would repeal the so-called two-out-of-three ownership rule, which prevents a person controlling a television network, radio station and newspaper in the same market.

Abolishing the rule would have allowed News Corp Australia, publisher of The Australian, to merge with Ten.

The Opposition Leader said the CBS deal was “good news for diversity” and jobs.

“I welcome CBS down under, I’ve got no doubt that this also shows the government needs to park their unnecessary media reforms,” Mr Shorten said.

“The case for abolishing the two-out-of-three rule was to save channel 10. Well CBS has saved channel 10 so we don’t need to tamper with media diversity laws. I say welcome CBS, welcome down under.”