* Ten unveils deeply discounted $240 mln capital raising
* Selling shares at A$0.20, 38.5 pct discount
* Shareholders include billionaires Murdoch, Packer,
* Ten struggling with falling ratings, revenues
* Shares on trading halt, down 60 pct this year
By Miranda Maxwell
SYDNEY/MELBOURNE, Dec 6 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
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
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
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
The network also cancelled its breakfast show after dismal
ratings, as well as The Circle, which resembled successful U.S.
talk show The View.