Ten reports loss in 2020, but ViacomCBS committed to the financial support
ViacomCBS-owned Network Ten (Ten Network Holdings) has reported a statutory loss after tax of $3.4 million for the 2020 calendar year, including significant items, according to its financial report lodged with the Australian Securities and Investment Commission.
Excluding significant items, Network Ten reported an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) profit of $53.6 million and an underlying profit after tax of $48.1 million.
Management are in the final phase of merging the ViacomCBS and Network Ten businesses in Australia, which have so far cost the business $17 million in restructuring costs. The ongoing restructuring has impacted news, operations and technology departments of the business. These changes included centralising the presentation of the weekday Ten News First bulletins in Sydney and Melbourne, while the Brisbane, Adelaide and Perth bulletins have remained locally produced.
As at 31 December 2020, the company had a net current asset position of $73.8 million and positive equity of $43.5 million.
The operations of the company are financially supported within the funding arrangements available to the ViacomCBS global group and ViacomCBS has confirmed its commitment to provide sufficient financial support to the business to enable it to meet its financial obligations.
The company is making continued investments in the new data and analytics insights for sales and clients across broadcast and digital. Further investments have also been made in the digital platforms to improve user experiences, gather data and monetise audiences more effectively.
Significant changes as a result of COVID-19 were cited in the report as having negatively impacted the network and are expected to “continue to impact the macroeconomic environment, as well as ViacomCBS’ business, financial condition and results of operations in 2021”.
The impact of COVID-19 on the network included the cancellation of broadcast events for which it had the rights to including the 2020 Formula 1 Australian Grand Prix and 2020 Australian MotoGP. Overall, the network reported a loss of $4.2 million in write downs of program rights. It also wrote-off $30.2 million in provision for onerous contracts.
Source: Ten Network Holdings annual report 2020 [click to enlarge]
The company experienced delays of the 2021 television broadcast season as a result of temporary production shutdowns including reduced episodes of The Bachelor Australia and The Bachelorette Australia; abandonment of content that was not completed including Australian Survivor, The Amazing Race Australia and Five Bedrooms, and the delays in the delivery of programming to third parties, which all resulted in and fewer original programs and live events airing on the network.
The report stated: “While production has resumed, we are not able to predict whether we will encounter future production delays or shutdowns, or if and to what extent our revenues will continue to be negatively impacted. Additionally, with the resumption of production we began incurring incremental costs relating to health and safety protocols, which are expected to continue throughout 2021.”
“Management currently believes that it has adequate liquidity and business plans to continue to operate the business and mitigate the risks associated with COVID-19 for at least the next 12 months from the date of this report.
ViacomCBS will next week launch its new paid streaming service Paramount+ which replaces its current offering 10 All Access.
The network has in 2021 entered into an agreement with the Australian Professional Leagues (APL) for the exclusive rights to broadcast the A-League and W-League on Network Ten and Paramount+. The costs of these rights will be shared with ViacomCBS entities based on the usage of content, stated the report.
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Olivia Kruimel is the managing editor at Mumbrella. She has more than 15 years of experience in journalism, communications and marketing. Her journalism career began at Fairfax Media (now part of Nine) and includes various B2B publications such as B&T, Travel Today and ALB. As a marketer Olivia has worked for Standard Chartered and various global law firms.
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