CBS Corp Seals Deal to Acquire Network Ten

On Monday, the American mass media giant, CBS Corporation, announced it has agreed to buy Australia’s commercial broadcasting network, Network Ten, which had recently been placed into bankruptcy.

CBS Corp. is the most-watched television network in the United States, while Network Ten is Australia’s third largest free-to-air commercial network.

CBS Corporation’s Network Ten Acquisition

The American broadcaster has said that it would use the acquisition of the embattled Network Ten to further expand its access in the Australian market, as it plans to launch its digital subscription video on-demand and live streaming service, CBS ALL Access, in the country. This signifies another international territory announced for CBS All Access this month.

Under the terms of the deal, CBS would gain Ten’s Eleven channel, of which CBS already has a 33% stake, channel One, and growing digital platform Tenplay. Meanwhile, the sale is said to be subjected to conditions, including approval by Australia’s Foreign Investment Review Board, and the sale price will be revealed in a report to creditors within days.

In  June, Network Ten was placed into voluntary administration. The takeover news from CBS came after billionaires and shareholders, Lachlan Murdoch and Bruce Gordon, had seemed poised to purchase Ten after getting clearance from the Australian competition regulator last week.

“Network Ten has played a significant role in Australia’s media landscape over many decades, and the sale of the business to CBS will allow the iconic broadcaster to move into a new chapter on a strong and stable footing,” Ten receiver and PBB Advisory, Partner Christopher Hill, said in a statement.

CBS, one of Ten’s key content providers, will fund the acquisition by refinancing existing secured debt arrangements in whole, the administrators said in a statement.

CBS is paddling into an Australian market where broadcasters, Ten in particular, are cutting costs as losses deepen, with advertisers following viewers to streaming services, such as Netflix Inc. and Amazon.com Inc’s Amazon Prime.

“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 said in a statement.

Chief Executive of CBS Studio International, Armando Nunez, said the acquisition presented CBS with “considerable broadcasting opportunities” in Australia, and allowed for further multi-platform distribution and growth.

“We are committed to the efficient, reliable, and successful turnaround, operation, and development of Ten to support continued growth in Australian media,” Nunez said in a statement.

Neither party unveiled details of the deal, but some analysts and local media valued Ten at A$200 to A$250, or $160 million to $200 million. Its shares had a market value of A$58 million before trading was suspended when the firm entered administration.

“CBS and Ten have had a strong relationship for a number of years; we are very excited about further developing that relationship… at this critical time,” said Ten CEO Paul Anderson.

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