Ten won't be biggest loser from strike
TEN Network Holdings said yesterday it was being forced to make extensive plans to cope with an emerging content crisis caused by the US writers' strike.
The company is considering expansion of major franchises including Australian Idol, Big Brother and The Biggest Loser if the strike extends into next year.
Revelations about the plans for the franchises have come as Ten has reported a 14 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to $122.5 million for the three months to November 30. Television EBITDA rose by 18 per cent for the quarter, to what analysts have estimated to be a figure of $117.1 million, buoyed by strong earnings from the company's coverage of the Rugby World Cup.
However, the strong result was tempered at the company's annual general meeting yesterday by concerns about the writers' strike, which has halted production on most of America's leading television shows.
Ten's television boss Grant Blackley told The Australian after the meeting that the company had no choice but to plan extensive measures to cope with any expansion of the strike.
"We're obviously looking at a lot of contingency plans while we work through the impact of the strike, because we're looking at all the franchises we have, with Big Brother, Idol and our new local version of So You Think You Can Dance," Mr Blackley said.
"Those shows are very much like a sponge. They are all Australian-produced, and we can expand them to take up some of the slack from the US."
At the AGM, questions from one shareholder prompted Ten's executive chairman Nick Falloon to defend the company's financial and share price performance over the last three years.
The shareholder pointed out that since December 2004 the company's share price had fallen by about a third, while its dividend had fallen by a similar amount. Over the same period, the shareholder noted, Seven's share price and dividend had dramatically risen.
Mr Falloon said he could not comment on how the market valued the company, but added: "There's been lots of speculation in the last couple of years in the sharemarket as to speculation of takeovers and the like, and that does obviously play a part in the reflection of share price. That may explain some of the movements in the share price, both up and down."
Mr Blackley said Ten benefited relative to its rivals from its "big franchise" strategy, given the uncertainty all networks were feeling about the lack of fresh American content: "We feel it's an advantage we've got in the marketplace by having big brands.
"We're talking over a couple of hundred hours of product that is expandable across those four franchises, so that's a lot of content. Arguably, we still have to invest in that content, but it gives us known brands that we can expand, rather than introducing unknown brands at probably a similar cost - so it's a risk/reward analysis."
While big US series run for an average of 22 episodes a year, Mr Blackley said the number of episodes being delivered to the networks was "probably 10-12 episodes, so to that end we're not necessarily going to get a full season".
Earlier, Mr Falloon told the meeting Ten was looking to increase its share of advertising among the three major commercial networks for the six months to December 31, to exceed the 30.3 per cent figure it achieved for the same period last year.
source: http://www.theaustralian.news.com.au/story/0,25197,22915312-643,00.html
The company is considering expansion of major franchises including Australian Idol, Big Brother and The Biggest Loser if the strike extends into next year.
Revelations about the plans for the franchises have come as Ten has reported a 14 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to $122.5 million for the three months to November 30. Television EBITDA rose by 18 per cent for the quarter, to what analysts have estimated to be a figure of $117.1 million, buoyed by strong earnings from the company's coverage of the Rugby World Cup.
However, the strong result was tempered at the company's annual general meeting yesterday by concerns about the writers' strike, which has halted production on most of America's leading television shows.
Ten's television boss Grant Blackley told The Australian after the meeting that the company had no choice but to plan extensive measures to cope with any expansion of the strike.
"We're obviously looking at a lot of contingency plans while we work through the impact of the strike, because we're looking at all the franchises we have, with Big Brother, Idol and our new local version of So You Think You Can Dance," Mr Blackley said.
"Those shows are very much like a sponge. They are all Australian-produced, and we can expand them to take up some of the slack from the US."
At the AGM, questions from one shareholder prompted Ten's executive chairman Nick Falloon to defend the company's financial and share price performance over the last three years.
The shareholder pointed out that since December 2004 the company's share price had fallen by about a third, while its dividend had fallen by a similar amount. Over the same period, the shareholder noted, Seven's share price and dividend had dramatically risen.
Mr Falloon said he could not comment on how the market valued the company, but added: "There's been lots of speculation in the last couple of years in the sharemarket as to speculation of takeovers and the like, and that does obviously play a part in the reflection of share price. That may explain some of the movements in the share price, both up and down."
Mr Blackley said Ten benefited relative to its rivals from its "big franchise" strategy, given the uncertainty all networks were feeling about the lack of fresh American content: "We feel it's an advantage we've got in the marketplace by having big brands.
"We're talking over a couple of hundred hours of product that is expandable across those four franchises, so that's a lot of content. Arguably, we still have to invest in that content, but it gives us known brands that we can expand, rather than introducing unknown brands at probably a similar cost - so it's a risk/reward analysis."
While big US series run for an average of 22 episodes a year, Mr Blackley said the number of episodes being delivered to the networks was "probably 10-12 episodes, so to that end we're not necessarily going to get a full season".
Earlier, Mr Falloon told the meeting Ten was looking to increase its share of advertising among the three major commercial networks for the six months to December 31, to exceed the 30.3 per cent figure it achieved for the same period last year.
source: http://www.theaustralian.news.com.au/story/0,25197,22915312-643,00.html
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