UPDATE 2-Australia's Ten Network billionaires under fire, seek more cash
* Ten unveils deeply discounted $240 mln capital raising
* Selling shares at A$0.20, 38.5 pct discount
* Shareholders include billionaires Murdoch, Packer, Rinehart
* Ten struggling with falling ratings, revenues
* Shares on trading halt, down 60 pct this year
SYDNEY/MELBOURNE, Dec 6 (Reuters) - The billionaires who run Australia's loss-making Ten Network Holdings Ltd faced angry shareholders, conceding that results were poor as it broke its word and launched a deeply-discounted capital raising, its second in under six months.
Australia's third-ranked television network, which counts some of the country's richest people - Lachlan Murdoch, Gina Rinehart and James Packer - among its top shareholders, laid out the A$230 million ($240 million) capital raising programme to pay down debt as it struggles to find hit shows to make the best of a weak advertising market.
Those three are estimated by local media to have lost over A$350 million on their combined investment in Ten over the past two years.
Lachlan Murdoch, 41, son of News Corp. Chairman Rupert, addressed shareholders in Sydney just hours after his paternal grandmother died.
"Poor execution of our spring programming schedule, compounded by a weak advertising market, has negatively impacted our results," Murdoch told Ten shareholders.
Only a few months ago, Ten Chief Executive James Warburton - who took over from Lachlan in March - reassured investors there would be no need to raise fresh cash.
Ten shares remain on trading halt at A$0.325 until Monday, meaning the fundraising at A$0.20 a share is at a discount of 38.5 percent. The stock is down 60 percent this year.
"No-one's got any major faith in management," said Chris Weston, strategist at IG Markets.
"Its a credibility issue," he said. "Ten has a very messy business structure and is trying to cut costs to survive."
Lachlan Murdoch together with James Packer, the son of late media billionaire Kerry Packer, sat on the board of collapsed telecoms venture One.Tel in the 1990s.
Australian newspapers and television networks are struggling in a tough market, with advertising depressed and competition intensifying on the internet. Viewing options for Ten's key 16-to-39 year old target audience have boomed with access to smart phones and alternatives such as YouTube.
Ten has been losing market share to top-ranked competitor Seven Network and the Nine Network. Critics say performance has worsened since Packer bought 18 percent of Ten in 2010 and sold half to Murdoch, who became Chief Executive.
"When he took over, he told the staff he was going to turn the network around from the disaster it was. The share price was (once) around A$4. He's certainly turned that around," a long-serving Ten employee said, speaking on condition of anonymity.
The difficulties at Ten come after the Murdoch dynasty's reputation has been severely damaged by a phone-hacking scandal.
Observers were puzzled when Packer, Murdoch and Rinehart bought large stakes in Ten in 2010 when the media landscape was already shifting online.
"Maybe it's an ego thing. Maybe they thought they are such amazing businesspeople that they could turn around a sinking ship into something glorious," said one analyst who declined to be named.
As a director at News Corp, Lachlan Murdoch has an interest in Australian pay TV company Foxtel, which competes with Ten.
"NOT GOOD ENOUGH"
Warburton said on Thursday that advertising conditions and Ten's performance had deteriorated since mid-October. Ratings and ad sales were "not good enough", he said.
"The company will struggle to deliver audience reach that advertisers will pay for," Nomura said in a report. "Ten needs to revise its programming strategy to secure live audiences."
Ten made a net loss of A$12.9 million for fiscal year 2012 as ad sales fell 14 percent and it axed flops such as Everybody Dance Now, hosted by Sarah Murdoch, wife of Lachlan.
Ten's "dramality" show The Shire, set in southern Sydney, vied to be Australia's answer to the U.S. hit Jersey Shore or the U.K's The Only Way Is Essex, but has proved a ratings calamity.
The network also cancelled its breakfast show after dismal ratings, as well as The Circle, which resembled successful U.S. talk show The View.