Bulls vs. Bears, page-23

Hi Autosime

In regards to the Ten Network, I would have said that the troubles they are having at the moment would be a plus for Channels 7 and 9 but the CEO of Nine this week made the comment that the demise of Network 10 would not be in the interest of FTA networks and would send a negative message to advertisers.

I also believe that 10 will still be around for some time yet. The main reason is that the broadcasting licence is very valuable to the likes of Lachlan Murdoch and Foxtel. Fox Sport really needs access to the major sports that are protected by the anti-siphoning list.

If Foxtel or another company can become majority holder in 10, (the media reform bill needs to pass the senate first), then under the anti-siphoning laws they can broadcast the event on channel 10 and simultaneously broadcast on their own pay TV network.

Also another reason why 10 is struggling is because of the content contracts they have with the likes of Fox studios. A lot of commentary has been banded around about how Lachlan Murdoch can risk going guarantor for 10 but they also fail to realise the huge amount of money the Murdoch’s are making from channel 10 through Fox. (I’ve read that channel 10 paid $120 million for content between Fox and one other US network - can’t remember which one it was).

According to a report in the Australian Financial Review, 10’s broadcasting licence, although written down over the last few years, is probably worth close to $300 million to Foxtel.

Put it this way, NEC paid $500 million for the broadcasting rights for Australian Cricket, Foxtel has subscription fee income of over $3 billion as well as $500 million in advertising income – If they can snap up 10’s broadcasting licence for under $100 million it is small fry for them if it can give them a shot a winning broadcasting rights to sports protected by the anti-siphoning list.