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The Canadian media group CanWest Global Communications has again stirred the Australian media sector into a frenzied round of deal-making with official confirmation this week that its A$2 billion ($2.2 billion) stake in Ten Network is in play with bids to be lodged by mid-February.
CanWest has a 56 per cent economic interest in the Australian broadcaster but under a deal brokered by Ten's independent directors, the winning bidder must also make the same offer to all shareholders, meaning the ultimate figure could hit A$4 billion. Changes in the media ownership rules this year will allow foreign buyers to take complete control of Australian TV networks.
Conjecture also emerged this week that the former chief executive of the Packer-controlled PBL and now executive chairman of Ten, Nick Falloon, and Ten's chief executive Grant Blackley were involved in a private equity bid for a management buyout of the broadcaster. That news was played down by Ten executives.
The sale timing is perfect for other potential investors, however, who will gain the best insight possible into how the network is tracking versus its rivals when official TV revenues and marketshares are released on Monday for the six months to December.
Ten's profit for the 12 months to August 31 dropped 34.5 per cent and earnings before interest, tax, depreciation and amortisation fell a further 15.6 per cent in the three months to November.
But the attention on Monday won't just be on the Ten results.
About six hours after the figures are released, Network Nine chief executive Eddie McGuire will make his on-air comeback, hosting a new games show as well as running the Packer capital city stations.
McGuire's grip on the top job has been subject to intense speculation in the past month and in two days time he will know if he's the first boss at Nine to be bumped off the top slot by the Seven Network in the advertising revenue stakes.
Already there's great confusion among the commercial broadcasters about who will end up beating whom.
Nine executives have been selectively preparing the market for the worst, advising some media buyers to expect Nine to lose to Seven in the December half across the mainland capital cities - Nine pipped Seven by just A$2 million in the six months to June and some predicted then that the Seven road train would roll over Nine in the December half.
But interestingly, Seven is also in the market at the moment playing down its rights as top dog, arguing Nine's A$60 million-plus summer cricket sponsorship windfall has saved the Packer network from its first revenue defeat in at least 30 years.
The Australian metro TV market for the six months to December will be worth around A$1.4 billion.
Ten too is downbeat on its fortunes. Like its shock drop for the six months to June, Ten is indicating it will again suffer a sub-30 revenue share in the December half - Ten is flagging around a 28 per cent share, which at least one rival is not buying.
"Ten will get to 30 per cent. It would have to go backwards by more than 7.5 per cent to go below a 30 [share]. They've had a really good Idol and AFL series. The money was flowing."
The only consensus between the commercial broadcasters at this stage is that the metro TV market will be down by 1-2 per cent in the six months to December, proving it was indeed a catfight for ad dollars last year.
Overall it seems the TV ad market has bounced back about 5 per cent in December and January and some are saying demand is trending well for the start of the 2007 ratings season.
One network executive said: "We're seeing good retail conditions at the moment. It's been a very good Christmas. I think we'll see growth of 5 per cent in this [June 07] half."
Ten's Grant Blackley is now painting a rosier picture, arguing the broadcaster's revenue would rise this year off the back of a 2.5 per cent rise in primetime audiences last year.
The official ratings season starts in the first week of February and the following six to eight weeks will determine which broadcaster has audience momentum and where the advertising will flow.
It will also have quite an impact on how much the Canadians can pull out of the Australian market.
