"With a market value of under $400 million, Ten looks ripe for the picking, if you believe that a third commercial TV network in Australia could be viable."Little surprise, then, that RBS Morgans predicted Ten's revenue will fall by a further 4% in 2013 (around $30 million) "with risk to the downside". That would take another 300 staff cuts to balance it up. It's all such a far cry from the beginning of 2011, when James Packer told Ten's board of directors that their company could be making another $100 million profit a year if it followed his and Lachlan's back-to-basics strategy. This involved making it a low-cost network that targeted the youth market again. Since then, the network's entire top management team has been boned, including chairman Nick Falloon, CEO Grant Blackley, chief programmer David Mott, sports supremo David White, news boss Jim Carroll, CFO John Kelly and COO Kerry Kingston, who were obviously blamed for doing such a "bad" job in the past (when the share price and profits were so much higher). The cost of getting rid of this hugely experienced bunch appears to have been almost $10 million in severance payments. In their place -- for 10 months, while new CEO James Warburton was banned by the Supreme Court from taking up his position -- Lachlan Murdoch steered the network himself and picked up $260,000 a month in management fees. What have shareholders got in return? With all its old managers gone, Ten has gone back to targeting the 16-39 demographic, which most pundits now believe is too narrow to sustain a commercial network, in the face of hot competition from pay TV, digital channels, the internet and mobile devices. Ten has also dumped the AFL, one of its biggest ratings winners, repurchased MasterChef from the Murdochs' Shine production company at three times its original cost, and made a series of poor program decisions, such as the ill-fated and expensive Breakfast show, fronted by the appalling Paul Henry (a personal choice of Lachlan's), the fast-flopping Everybody Dance Now, hosted by Lachlan's wife Sarah and axed after a few episodes, and the dire The Shire, which was also a ratings disaster. Back in April, when Ten's half-yearly results were published, the company headlined its announcement to the market with "Ten's turnaround continues". In its latest glossy 68-page annual review for 2012, Lachlan follows up by telling Ten's long-suffering shareholders: "There is no question that Ten Network Holdings enters 2013 as a different company than it was just 12 short months ago." It's hard not to disagree, because the share price back then was still close to $1 and the company appeared to have a decent future. Now it's looking like a basket case. With a market value of under $400 million, Ten looks ripe for the picking, if you believe that a third commercial TV network in Australia could be viable. Ex-Ten insiders and ex-News Ltd heavies have long believed the network could end up as part of the Murdoch family empire -- with Lachlan running it. We're not so sure about that, but we will be watching this space. And if Rupert does want it, it's certainly going cheap.
Thanks to Lachlan, Ten ripe for the picking
Have Lachlan Murdoch and James Packer repeated their One-Tel disaster at Ten, or is it just bad luck to have bought a free-to-air TV network at a bad time? It's looking more like a train crash.