What does revenue by itself have to do with it? It LOSES money because its costs are higher than its revenue. It's debt servicing costs are low, but it still loses a lot of money. Why is that?
i) revenue is falling because audiences are shrinking (due partly to viewing fragmentation driven by the internet-based competitors like Netflix, Stan)
ii) costs for programming are rising, particularly sport
iii) they have an expensive deal for US content which does not deliver revenue to cover its cost
And secondly, the guarantors are guaranteeing the debt to Commonwealth Bank.... not to Ten or anybody else. If Ten can't make good on its debt to CBA, then CBA hits the guarantors up for the payment and then the guarantors have rights to step into CBA's role, which enables them to put Ten into administration. This is just what CBA might have done if they didn't have the guarantors there to protect them. The whole point is to protect CBA, who wouldn't have taken the risk lending to a basket case like Ten without the extra protection from the billionaire guarantors.
TEN Price at posting:
27.8¢ Sentiment: Sell Disclosure: Not Held
