Away from the faux-glitz and glamour of last night’s Logies, it’s the banks/hedge funds and other members of the banking world that are the real power behind Australia’s broadcast media.
It was the $5 billion dollar gorilla in the back of the room, just behind where the James Packer’s Nine used to hide their unwanted executives.
No wonder the stars, starlettes and other on-camera folk of Australia’s commercial and other TV Network beg, borrow and tart for free clothes, jewels and make-up.
Who would have thought that the Nine Network, once dominant and ruthless, now exists on the charity of a group of desperate bankers who gave its owners, PBL Media, an 18 month interest holiday (but forced the owner, CVC to tip in $320 million towards its ownership of PBL Media); that the Seven Media Group, or rather the Seven TV network, would have no balance sheet value for its half owner, Seven Network Ltd; that the Ten Network would once again be operating in the red and its Canadian parent, Canwest, is the international media basket case, a nose in front of INM in London and The New York Times Co; and that SBS, our quasi-public commercial broadcaster is facing a $9 million revenue shortfall, that, while not anywhere near as bad as Channel Four’s growing black hole in the UK, has echoes of its woes as ad revenues drop.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
And then there’s Prime, Seven’s regional affiliate, bailed out by a combination of Kerry Stokes, Lachie Murdoch, with founder Paul Ramsey unable to keep control because he didn’t have enough money; Macquarie Media, owner of Southern Cross, the Ten Network; like its sponsor, struggling on the smell of an oily rag and in need of fresh capital; and Bruce Gordon’s WIN, actually the 4th biggest network, now down over $120 million on a mistimed play in Ten shares.
And who would have thought that the most solvent TV Network in the country would be Foxtel (because it is a monopoly in Pay TV) and that among the Free-to-airs, that the perennial struggler, the ABC, would be left standing with its financial nappy held in place by safety pins and bailing wire, not showing the stretch marks and strains of the Howard years. Such was the reality of Australian TV last night on its night of nights.
And who would have thought that the owner of TV Week, which ‘owns’ The Logies, would be owned by the other half of struggling PBL Media: the once dominant ACP Magazines, now a shadow of itself and still being cut to pieces by an ignorant management still grappling with the aftermath of the indulgent days of James Packer and John Alexander.
A year ago at the 50th Logies, only the Nine Network was in financial trouble: Ten was profitable, but under pressure, likewise Seven. In fact you could even read details of Seven’s performance. But not any longer after Kerry Stokes buried the business in platitudes and write-offs. The regionals, Macquarie Media, Prime and WIN, were all apparently solid, but WIN’s Ten play was showing up as the Ten share price fell after Canwest got greedy and held on.
Of course, the Gold Logie for debt goes to the Nine Network’s owners, PBL Media, with one desperate debt renegotiation under its belt. The Silver Logie goes to Seven for the amazing news in the interim profit statement that the TV arm now had no value after write-downs and asset impairment. That view is nonsensical, but this is commercial TV, with the most creative accountants left in the business.Of course, this leaves Ten without a Logie, but hang on, there’s the hall of fame: Ten is a serial loss maker in the 20-odd years since Frank Lowy briefly owned it and then the banks possessed it. The losses are currently mounting, but it’s the race between the Aussie red ink and the Canadian implosion of its parent that holds interest.
SBS’s woes are a tribute to blind faith in financial freedom and advertising. Building budgets on government largesse and running over, leads to cutbacks and is a hazard of the model (Just ask the ABC, Australian Opera etc). Building a budget on both government grants and ad revenues and not factoring in a possible fall in TV revenue at the end of 2008 when things were sliding, and cutting back then, is tantamount to commercial cupidity, especially by the board. There are a couple of people on the SBS board who know better and should have been urging caution upon CEO, Shaun Brown.
So the indentured workers of the indebted partied hard at Crown Casino overnight and well into this morning. And that’s another irony. While he was lauded for selling Nine and ACP and making billions, James Packer has proved himself to be just as poor a judge of business conditions as the media magnates he left behind in pursuing a dream to be a big wheel in global gambling. A red Logie for him.