Back to basics for the future, says Ten chief
Cost-cutting, programming execution and a slightly older audience mix are the right ingredients to turn around the fortunes of Ten, Mr McLennan said.
"We chopped and changed too much last year, so we're really going back to basics, which is making sure that we stabilise the business, and making sure that we have a more predictable schedule, and define what our audience should be," he said. "We're not looking for any radical shifts in terms of strategy."
Ten Network shares got a boost on Tuesday despite reporting a $243 million loss for the six months to the end of February, which included restructuring costs and a $292 million write-down to the value of its television licence.
Revenue from continuing operations was down 15.6 per cent to $302 million.
The network indicated there are few signs of improvement in the advertising market and the outlook remains uncertain. Ten stuck to its target of capping its cost base, ex-selling costs, at $560 million.
The core television business remained profitable, with underlying earnings before interest, tax depreciation and amortisation of $34.9 million.
The company reported that it had managed to arrest its ratings declines from early this year with good audience numbers for the Australian Formula One, MasterChef: The Professionals, and The Biggest Loser: The Next Generation. "We're trying to deliver a more predictable schedule to advertisers community and the wider audience out there," Mr McLennan said.
While sport is a potential plank for Ten to rebuild its audience, the company signalled it would not pay over the odds for cricket rights or any other sports programming.
"The success of the network is not predicated on having a major sport," Mr McLennan said, but added that Ten believes there is real value there at the right price.
The cautious approach also means there will be no quick turnaround either.
"We're absolutely focused on growing our share, and getting programs that stick, and that just takes time," Mr McLennan said.
Ten confirmed it is in talks with its regional affiliate Southern Cross, which is also negotiating with Nine Entertainment about an affiliate deal and possible merger.
"We're negotiating in good faith with them. We hope to get that resolved in the near to medium future but we're actively engaged in that regard," Mr McLennan said. He said the network did not want to flag to the market what its contingency plans are if Southern Cross defects to Nine, but offered some favourable words for Nine's current affiliate WIN Television.
"WIN [is] a very good company with a strong commitment to local news. No doubt they have been a very good partner to Channel Nine over the years. But again, our focus at the moment is all about Southern Cross," Mr McLennan said.
Ten shares closed 2¢ higher on Tuesday at 31.5¢.
Frequently Asked Questions about this Article…
Hamish McLennan says Ten is going "back to basics" rather than making radical shifts. The focus is on cost-cutting, better programming execution, stabilising the business, delivering a more predictable schedule for viewers and advertisers, and targeting a slightly older audience mix to rebuild ratings and grow market share.
The article says James Warburton was sacked in February after a "disastrous year" for the network. That period of poor performance prompted the leadership change, which led to Hamish McLennan taking over and signalling a return to a simpler, more predictable strategy.
Ten reported a $243 million loss for the six months to the end of February. That result included restructuring costs and a $292 million write-down to the value of its television licence, and came alongside a 15.6% fall in revenue from continuing operations to $302 million.
Yes. Despite the headline loss, Ten's core television business reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $34.9 million, indicating the operating business remained profitable over the period.
Ten said there are few signs of improvement in the advertising market and the outlook remains uncertain. In response, the network is sticking to a target of capping its cost base (excluding selling costs) at $560 million to help manage through the weak ad environment.
Sport is seen as a potential plank to rebuild Ten's audience, but McLennan was clear the company will not "pay over the odds" for cricket or other sports rights. He said the network's success is not predicated on having a major sport, though Ten sees value in sports at the right price.
Ten confirmed it is negotiating in good faith with its regional affiliate Southern Cross, which is also in talks with Nine Entertainment about an affiliate deal and possible merger. Ten hopes to resolve discussions in the near-to-medium term but did not outline contingency plans if Southern Cross were to switch to Nine; the network also spoke positively about WIN Television as a strong local-news partner.
Despite the big reported loss, Ten Network shares received a boost and closed 2 cents higher on the day, finishing at 31.5 cents. The positive trading reaction reflected investor attention to the company's stabilisation plans and core profitability.
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