When Chanticleer sifted through the entrails of the Ten Network...

When Chanticleer sifted through the entrails of the Ten Network Holdings corporate collapse there was more than the usual amount of twisted bits.
It would seem a series of coincidences involving the Murdoch-controlled 21st Century Fox played a critical role in the directors deciding to put the company into administration.
It just so happens that one of the coincidences involving the Murdoch-controlled film company occurred around the same time that Lachlan Murdoch and fellow billionaire Bruce Gordon had threatened to sue all the directors of Ten if they went ahead with a recovery plan.
That threat was contained in a letter sent to the Ten directors on Monday night at 9pm. The same letter was sent to the directors of Ten's subsidiary companies, which included Ten chief executive Paul Anderson and chief financial officer Dave Boorman.

To put it another way, Murdoch was threatening to sue Ten director and Foxtel chief executive Peter Tonagh, and Gordon was threatening to sue Ten director and WIN Corporation executive chairman Andrew Gordon. Andrew Gordon is Bruce Gordon's son.

Tonagh's company is half-owned by News Corp, which is co-chaired by Lachlan Murdoch
The threat was not taken lightly by the directors of Ten. The directors told the ASX on Wednesday that the letter from Murdoch and Gordon left them "with no choice but to appoint administrators".
Of course, the administration puts Murdoch and Gordon in the box seat to buy the company if there are changes to the media ownership laws.
The first coincidence involving 21st Century Fox relates to the attempt by Ten to renegotiate its content and programming arrangements with the Hollywood studio. These negotiations were a critical part of a plan that had been worked on by Ten's management for the past five months.

The company was trying to develop a viable plan for recapitalising or refinancing the company and ridding itself of the guarantees of its $200 million facility from the Commonwealth Bank. The CBA facility was guaranteed by Murdoch, Gordon and James Packer. It was due to expire in December.
Ten's recovery plan was proceeding well until last week when 21st Century Fox could not come to an agreement on a replacement content package.
Anderson and his team had done an extraordinary job putting together a plan that would have delivered a $50 million positive impact on earnings in fiscal 2018 and $80 million in fiscal 2019.
Add in the expected licence fee cuts of $22 million in 2017 and $12 million in 2018 and you had the makings of a $90 million boost to the bottom line. The management and the board were convinced this would be sufficient to allow the balance sheet to handle a $250 million loan.

But there was one final piece of the puzzle missing – an agreement with 21st Century Fox to agree to a replacement content supply agreement. During the negotiations over the past two weeks, Ten made it clear to 21st Century Fox's president of international distribution, Mark Kaner, that there was a certain urgency to getting a deal done.
Last week, Kaner became difficult to contact. Last Friday, after Murdoch and Gordon said they would not renew their guarantees of the CBA facility, the board was still confident it could get a refinancing facility in place.
Rival Hollywood studio CBS had already agreed to a replacement content deal. The moment that Kaner agreed to a new deal Ten would have prepared a term sheet for its corporate adviser Moelis.
Moelis had advised the board that there were several options for refinancing by distressed credit funds in the United States.

On Saturday and Sunday, Kaner was uncontactable. Ten was trying to get him several times an hour, without success.
The board, chaired by David Gordon (no relation to Bruce Gordon), knew it was facing the need to use its CBA facility this week to pay wages and meet other financial commitments.
But all of its plans collapsed in a heap when the letter from Murdoch and Gordon arrived on Sunday night. It was sent by Fort Street Advisers on behalf of the two billionaires.
The letter, a copy of which has been obtained by Chanticleer, said the billionaires understood the company would need $45 million "in the coming few days".

It said that the company would need to draw down $147 million by the end of this week and $173 million by the end of July.
The letter said that unless the company had in place alternative finance, Murdoch and Gordon would consider that Ten directors could not avoid an administrator.
"Fort Street Advisers has been requested by our clients to put you each on notice that, to the extent they are damaged by you failing to prevent drawdowns under the existing facility in breach of the statutory requirements mentioned above, they will reserve their rights to pursue the statutory compensation rights they may have against you personally," the letter said.
The ultimate irony and perhaps the ultimate coincidence is that one hour after the company was put into administration, there was an email from Kaner at 21st Century Fox saying he had agreed to a replacement content deal for Ten.




















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