Oct 27, 2011

Murdoch takes the heat as Ten’s profit plunges 90.5%

The Ten Network's full year profit plunged 90.5% as stand-in CEO Lachlan Murdoch drives a clean-up of the company's books that will make it easier for his replacement, James Warburton, to look good in his first year.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

The Ten Network's full year profit plunged 90.5% as stand-in CEO Lachlan Murdoch drives a clean-up of the company's books that will make it easier for his replacement, James Warburton, to look good in his first year. All the costs (including more than $85 million of restructuring charges reported, including $39 million writing down or off the value on unprofitable sports rights for its ONE digital channel) relate to programming and other decisions by the ousted former management team, led by executive chairman Nick Falloon and CEO Grant Blackley. It's a standard technique by new management teams or shareholders as they seek to justify their takeover and sackings. Ten's operational and strategic review continues, but one thing that escaped axing was the commitment earlier in the year to pay a final dividend. Suffering shareholders, who have seen their shares sink from $1.35 in May to 85c this morning, a loss of more than 40%, will receive a payment of 5.25c a share, which will please  Murdoch, James Packer, Gina Rinehart and WIN's Bruce Gordon, all of whom effectively control the company with about 42% of the issued shares. About $53 million will be paid to shareholders in the dividend, which means the four billionaires will share in about $22 million. The hard-pressed Gordon will get about $7.5 million and Packer  and Murdoch will get about $4.7 million each, while the Perth-based Rinehart will get just over $5 million, which will go a little way to meeting some of the costs of their assault on the boardroom of Australia's third commercial TV network. Gordon is the heaviest loser, with much of his stake acquired above $3 a share years ago. Packer bought in late last year (and then sold half his 18% stake to Murdoch) with the shares costing more than $1.10. Rinehart probably has a cost of closer to $1.20, but she did sell some shares at 93c a couple of months ago to reduce her stake to less than 10%. Even though there was a commitment to pay the dividend, you'd have to ask why, given that net profit amounted to just $14.2 million. So Ten will have to borrow about $38 million to make sure shareholders, including the big four, can feel good. While you can argue that it is a confidence-building move in that the company and the board are upbeat about the outlook, the fact that four big shareholders will get some of the holding costs covered in the payout introduces a note of self interest into the decision. In the statement from the company and Murdoch, there was little talk about how the company's ratings have sunk this year on the main channel. The overall ratings, including revamped ONE channel and Eleven, which started last January, have lifted the Ten share by 4.9%. But the main channel share is down and the company has lost share in the TV ad revenue battle with Nine and Seven. The statement talked a lot about the clean out and cost cutting and what 2012 would bring, when Warburton, whom Murdoch poached from Seven, will become CEO. It's clear that Ten's costs have been chopped sharply and Murdoch was promising this morning that 2012 costs would be flat and wouldn't rise from the 2011 level. That's come at a cost, with the ending of the late news, the 6.30 With George Negus and state-based weekend broadcasts have been stopped and consolidated into one weak national bulletin. Monday-to-Friday bulletins have been extended by half an hour because it is cheaper than commissioning a new soap drama to fill a half-hour spot. And when the Negus program ends, the 7PM Project is being extended to an hour, renamed The Project, and starting at 6.30pm. It's audience will fall as a result. Ten is starting a three-hour breakfast program to take on Seven's Sunrise and Nine's Today show next year. Murdoch said that Ten was only getting $3 million a year from an advertising market for breakfast TV of $100 million. He promised that Ten would stick with the breakfast show -- it would be with the network "for a decade".

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8 thoughts on “Murdoch takes the heat as Ten’s profit plunges 90.5%

  1. eric

    Looks like Lachie is doing another “One tel” at Ten LOL

  2. Venise Alstergren

    ERIC: Indeed you could be right LOL.

  3. animaldander

    Ha ha ha ha HA! suck eggs Ten. and anyone who tried to make a profit from you

  4. Mike Flanagan

    Why be amazed at Lachlan’s lack of skills. The Australan has been
    running at a loss for over twenty years. The ‘old man’ Rupert has
    probablydestroyed over a billion dollars of shareholders equity over
    the last two years
    James has yet to be brought to a account and the cost is yet to be
    So it actually runs in their genes as they all gallivant around the world
    protecting their nests in shareholder funded executive jets.
    Rupert, his father is the only executive chairman that can run a personal
    hobby like the Australian at the expense of his shareholders with
    Rupert is the only executive chairman that lets a senior member of his
    staff deride his own mother ‘as a geriatric old fool that should mind
    her own business ‘, on a publicly broadcasted television show
    And in defense of Lady E Murdoch I feel confident in asserting it is
    not her business ethics and genes that Rupert displays, for she has
    done commendable work for the community

  5. Venise Alstergren

    MIKE FLANAGAN: Rupert’s father was an utter bastard with a capacity for going for the throat but I don’t know where Rupert’s mad dog killer instinct came from. Terrifying, isn’t it?

  6. Mike Flanagan

    Venise Alstergren
    Thankyou for obsevations on the disreputable Keith Murdoch
    I nearly fell of my chair with derisive laughter when I heard Rupert
    describe him as a ‘fine’ journalist at the British Parliamentary enquiry
    into his corrupt practises. The laughter became painful and
    potentially a threat to my health when I listen to him inform the
    same enquiry that his father had gifted him the Adelaide Tyser for him
    to do ‘good’
    His ‘profound humility’ is displayed by sacking hundred of his loyal
    employees at the NOW in order to maintain access to the backdoor key of
    10 Downing St.
    With a wink and a stroke of a pen he dismisses the staff whom I dare to
    say have offered many years loyalty and commitment to his empire
    building ambitions . While many of these ex employees battle with
    the reality that they no longer have the means to support their
    financial and family commitments Rupert pays generous severance
    payouts to anyone that may have records of his corrupt and
    unscrupulous activities for their silence.
    Vanity Fair inform us of the dysfunctional family that he has
    engendered. Fortunately his ingrained mysogny has allowed the
    female offspring to escape the repititive disreputable and unscrupulous
    behaviour demonstrated by the male offspring.

  7. Venise Alstergren

    MIKE FLANNAGAN: I loves ya. Someone who understands the inherited glory (I jest) of the Murdoch empire. Well done.

  8. Owen Gary

    Im absolutely distraught, I think I will hold a midnight vigil by candle-light for dear ole Rupret!!! (from the film – dirty rotten scoundrels)

    He should be made to wipe his ass on all the rubbish he has printed over the decades, hopefully he would die from ink poisoning!!!!

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