Ten gets back to basics after $243m loss
Ten Network chief executive Hamish McLennan has signalled there will be no big changes in strategy as he looks to rebuild the No.3 commercial television network after a disastrous year that led to the sacking in February of his predecessor, James Warburton.
Cost cutting, programming execution and a slightly older audience mix are the right ingredients to turn around the fortunes of Ten, according to Mr McLennan.
"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," Mr McLennan said.
"We're not looking for any radical shifts in terms of strategy," he said.
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 that there are few signs of improvement in the advertising market and the outlook remained 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 reported for Australian Formula One, MasterChef: The Professionals, as well as The Biggest Loser: The Next Generation.
"We're trying to deliver a more predictable schedule to the advertising 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 were if Southern Cross defected to Nine, but offered some favourable words for Nine's current affiliate, WIN Television.
"WIN are 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," he said.
Ten shares closed 2¢ higher on Tuesday at 31.5¢.