CBS Corp (CBS.N), the United States’ most-watched television network, on Monday said it plans to buy its biggest customer in Australia, Ten Network Holdings Ltd (TEN.AX), and launch its streaming service in the country.
Through the deal, Ten’s biggest creditor has thwarted a takeover by a consortium led by Lachlan Murdoch – co-chair of CBS rival and fellow Ten creditor News Corp (NWSA.O) – that was widely expected after Ten entered administration in June.
“We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar,” CBS Chairman and Chief Executive Leslie Moonves said in a statement.
CBS is wading into an Australian market where broadcasters, and Ten in particular, are cutting costs as losses deepen, with advertisers following viewers to streaming services such as Netflix Inc (NFLX.O) and Amazon.com Inc’s (AMZN.O) Amazon Prime.
Ten booked a A$232 million half-year loss in April, and rivals Seven West Media Ltd (SWM.AX) and Nine Entertainment Co Ltd (NEC.AX) swung to annual losses after writing down TV assets.
But the deal with Australia’s least-watched commercial network also buys CBS a foothold in the local online viewing market via Ten’s digital outlet Tenplay, as it seeks to capitalize on overseas sales of its proprietary shows.
“I certainly would welcome the Ten Network coming into a period of stable ownership and financially stable circumstances,” said Prime Minister Malcolm Turnbull. “That would be in the interests of the network, its employees, and, of course, its viewers.”
Neither party disclosed details of the deal, but analysts and local media valued Ten at A$200 million to A$250 million ($160 million to $200 million). Its shares had a market value of A$58 million before trading was suspended when the firm entered administration. (Reuters)
