Today, the Australian free-to-air broadcaster, Network Ten announced it will go into voluntary administration, after months of struggling with ratings and money issues.
But what does this all mean? Here’s what you need to know.
Voluntary administration is when a bankrupt company is placed in the hands of an independent person who can assess all the options available, and generate the best outcome for them.
Ten chose to appoint Melbourne accounting firm, KordaMentha as their voluntary administrators who will be in charge of the future of the company and its subsidiaries.
Ten today said the administrator had advised it would work “closely with management, employees, suppliers and content partners while it carried out a financial and operational assessment of the business.”
But how did Ten get into this position in the first place?
For a long time Network Ten has been dealing with falling ratings and weak advertising revenue.
But their biggest issue is that their two key shareholders, News Corp co-chair, Lachlan Murdoch and regional TV owner, Bruce Gordon refused to guarantee a new $250m loan.
This is a massive problem as Network Ten has a $200 million debt facility from the Commonwealth Bank which needs to be paid by the end of December.
Ten was hoping to gain a $250 million loan to replace that facility, however could not find any shareholders to replace this sum.
So what is likely to happen to the future of channel ten?
For the time being there won’t be any change.
“During this period, the administrators intend to continue operations as much as possible on a business as usual basis,” Ten said in a statement to the stock exchange.
And fans of The Bachelor, The Project and MasterChef can rest easy as the “announcement will have no impact on our programming at all. It is business as usual” a spokesperson said.
However, their future of this free-to-air channel is very uncertain, with many people speculating what could happen.
One of the most likely outcomes is the network will not survive. In this case, other companies will take over such as NewsCorp says Peter Cox of Cox Media to Media Watch.
“News Corp would want to take this over. They can put their Sky News into Channel Ten and get economies there, they’re already supplying Fox product into the network so that would suit them, and I think they see that they would think that they could run this network more successfully in the future.”
Another likely outcome is that they will have to restructure the company internally.
“I think personally that the best result would be put it into receivership, restructure the company, restructure their program deals with the studios, and then try and make a viable business out of a more niche free-to-air channel.” Peter Cox said.
Whatever the outcome, it is likely Channel Ten won’t be the same again.