Ten to pay 21st Century Fox $3.4m if negotiations fall through

Network Ten will pay just $3.4m to News Corporation’s 21st Century Fox unless a new content agreement is negotiated, the administrator’s report  on the network has revealed.

While the Murdoch-owned media corporation’s liabilities are estimated to be around $195m, the company will receive a fixed amount of $3.4m, unless it can re-negotiate its contract.

The report, conducted by Mark Korda, Jennifer Nettleson, and Jarrod Villanni of Korda Mentha, was released yesterday evening, and said while estimated debts for creditors was at $215m, just $32m will be contributed to the Creditors’ Trust pools.

Pool A – which includes Endemol Shine Australia, Warner Bro Entertainment Australia, FremantleMedia Australia, and ITV Studios Australia – will received a combined return of $5.7m.

Ongoing trading creditors of Ten (Pool B) will receive a minimum of $15.52m, while financial, statutory and other creditors (Pool C) – including Australia and New Zealand Banking Group, Westpac Banking Corporation and the Australian Taxation Office – will receive $4.55m.

Onerous and terminated contracts (Pool D), which includes 21st Century Fox, will receive a total of $6.25m.

CBS is an excluded creditor, due to its purchase of Ten.

Yesterday, Korda Mentha confirmed CBS would provide a loan of approximately $142.7m to refinance the secured debt of the company, including shareholder guarantor fees for Lachlan Murdoch, Bruce Gordon, and James Packer.

Ten’s revenue for 1H17, was $339.74m, while its underlying EBITDA (earnings before interest, tax, depreciation and amortisation) was $2.44m.

Total loss, which included the license impairment applied to all radio and television broadcasters, was $232.2m.

Between June 14 and August 27, the company’s biggest fee went to programming ($95.397m).

Administration fees cost Ten $2.296m.

The announcement comes a week after CBS announced it would buy Network Ten by way of a refinance of existing secure debt arrangements.

Ten went into administration in June this year, after correspondence from Illyria and Birketu (Murdoch and Gordon’s respective investment vehicles) forced the network’s hand following a $232.2m loss reported in its half-year results in April.

At the time, CBS was one of Ten’s largest creditors, putting in a debt claim for more than $843.6m.

The second meeting of creditors will be held on September 12, where the CBS deal will be put to a vote.


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