Lachlan Murdoch
Lachlan Murdoch (Image: AP)

So many losers from the CBS purchase of the Ten. Just how many are there? Let’s count them (hot tip, they all have some link to the Murdoch family).

But first up, who are the winners? Besides Australian media consumers, there’s the former management at Ten who set up the CBS deal. It’s a bit after the event, but former Ten CEO Grant Blackley (now CEO Southern Cross Austereo) and Nick Falloon, Ten’s former chair (now chair of Fairfax Media) are grinners. Both set up the structure in 2010, with CBS owning a 33% stake in Eleven Co, the content joint venture sitting over Ten’s Eleven digital channel and the conduit of CBS content to Ten. Both were flicked by the know-nothing combination of Lachlan Murdoch, Bruce Gordon, James Packer and Gina Rinehart.

With that stake in Eleven Co CBS gained a very good understanding of Ten’s affairs, its problems, who was to blame and the worsening state of the Australian TV and media markets. And that was used to funnel CBS’s bid because of the monies owed under the content deal. You can bet that both men had a wry smile and a chuckle yesterday at the clever Murdochs being done over by CBS, with the bonus of Bruce Gordon thrown in.

Crikey mentioned the losses yesterday for the billionaires on the board — Lachlan Murdoch, Gina Rinehart, Bruce Gordon and James Packer. That’s an estimated $600 million down the tubes. Smarties! But Gordon and Murdoch stand out:

Bruce Gordon joined with Lachlan Murdoch to make a joint bid for Ten. As they gathered their forces in June, they sent off a nasty letter (via a team of financial advisers based in Sydney) and frightened the Ten board into pushing the network into administration by threatening legal action (one of those threatened happened to be the CEO of Foxtel, Peter Tonagh). Foxtel is owned 50% by News Corp and Tonagh is a former News executive. yet evidently Murdoch and Gordon had no compunction in upsetting him. Not a good look. There is now a suggestion that they knew Ten and CBS were close to doing a debt to equity swap based on the 33% stake CBS has in Ten’s Eleven digital channel, and that the legal threat was a stopper for that deal aimed to give the duo time to structure their bid.

Both Murdoch and Gordon knew James Packer wasn’t on board, but they failed to inform the market of that change. Bruce Gordon doesn’t have the 14.9% stake in Ten anymore that he planned to build into a 50% stake and de facto control, with Lachlan Murdoch occupied at News Corp and 21st Century Fox. So what does that do to the finances of his WIN TV empire? He does have 14.9% of Nine left and might try and turn that into gold. But then WIN is the regional affiliate of Ten and he is on the hook. Time to cash out and depart once and for all for his tax haven in the Bahamas?

Lachlan Murdoch: a rolled gold loser. He has to wear most of the blame for Ten’s collapse and the losses of $1 billion over the years since he first appeared on the share register as a result of a deal with his One.Tel bestie, James Packer, who had grabbed nearly 18% of Ten. Packer sold half his stake to Lachlan Murdoch — both have lost the lot. Lachlan Murdoch’s right-hand woman, Siobhan McKenna is also a loser. She suddenly departed the Ten board on March 15, with no notice or explanation. She never owned a Ten share while on the board for around five years. What was she doing as the network staggered from overspending crisis to over-valuation crisis? McKenna is now director of broadcast at News Corp Australia, overseeing Fox Sports, Foxtel and Sky News. But now Ten and next year Foxtel and Fox Sports will become one. Will she and Lachlan Murdoch try to find a new leader for the new merged pay TV company in 2017? The betting is yep. Former Ten chair and News Corp executive Hamish McLennan is another loser simply because he ran Ten poorly and left it floundering.

[How much money have the Murdochs made out of Ten?]

Foxtel/News Corp: big losers. There goes Foxtel/Fox Sports’ chance to grab back co-broadcasting rights to cricket’s Big Bash that they held for the early seasons, only to see them purloined by Ten. With this contract ending at the end of the 2017-18 season, CBS’ ownership should give Ten the clout to convince Cricket Australia to renew the rights. That would not have happened without a major financial partner and for a while Foxtel Sports/Foxtel was that. Foxtel also lost $77 million on its Ten stake (13.82%) to prop up Ten’s finances in mid 2015. News Corp will no longer be the biggest media company in Australia — even after the Foxtel ownership reshuffle. CBS is many times the size of News — US$28 billion against US$7.88 billion for all of News Corp.

Foxtel and Fox Sports do have co-broadcast rights with Ten for the rugby union, the F1 car races and the Supercar series in Australia. They can quite easily remain there, but CBS owns the CBS Sports Network, which is a US-based digital TV and satellite business. The question is: how far does CBS want to take its sports coverage in Australia? It could decide that working with Foxtel is a better deal than going it alone. Foxtel and Fox Sports face their own problems in the next year with that shotgun marriage as part of the restructure of Foxtel (which allowed Telstra to sell down its stake and eventually leave).

Sky News: losers, big time. News Corp bought control of Sky News last December not only to solidify its control of our nascent Fox News Channel, but as part of the control package when Ten came on board. Sky News was to do the Ten News broadcasts each day and night from new offices being built at News Australia HQ in Holt Street, Sydney. CEO Angelos Frangopoulos’ ambitions to be Australia’s King of Cable News (like a kinder, gentler Roger Ailes) are now on hold, as are those of the flock of News Corp babblers who wanted to be seen by a wider audience on Ten than on Sky News from 7pm (starting with The Bolter).

MCN: And what happens to the advertising sales venture with Foxtel/Fox Sports’ sales arm, MCN, and its ambitious head, Anthony Fitzgerald? Ten owns 25% of MCN. That deal was done when Foxtel invested money in Ten in mid 2015. That money ($77 million) has now been lost, but the MCN deal with Ten lives on — why? Does CBS leave the deal in place for the moment, or spend millions taking back control of its advertising and not ceding control to the Murdoch-controlled Foxtel? If you were CBS you’d want to check the books and make sure there were very high Chinese walls inside MCN between the Ten sales group and the pay TV sales groups.

[Who really killed Channel Ten?]

Endemol Shine/Fox Studios produce some of Ten’s best programs, such as MasterChef Australia. Those contracts won’t change if the programs rate. If they don’t (Shark Tank, Australian Survivor), the salad days are gone. Modern Family from Fox is dying on air. CBS’ NCIS is Ten’s most popular overseas program and the most popular US drama on Foxtel.

Seven/Nine Networks? Seven, no real change except it faces a very big and very well run competitor with ideas and products (such as CBS: All Access) that could make Kerry Stokes’ world just that much harder. Nine Network though faces perhaps the big question — the future of 60 Minutes. It is the flagship program for CBS in the US. Nine pays a fee to CBS for the rights. The question is can CBS take back those rights now that it is going to compete with Nine in Australia. You can bet checking the licence agreement was the first thing Nine CEO Hugh Marks did yesterday when he heard the CBS news about Ten. Stan, the streaming company co-owned by Fairfax Media and Nine Entertainment sources some of its content from CBS. That will now be up in the air with CBS:All Access starting next year as a rival.

Ten: Will 21st Century Fox/News/the Murdochs take back some programs, The Simpsons for example, or MASH, because of the change in ownership? Regardless, Ten will be relieved with this deal because Viacom (which is also owned by CBS’s parent, National Amusements) owns Channel 5 in the UK. Channel 5 broadcasts Neighbours and finances much of the budget, Viacom at one stage was not inclined to support continuing to finance the program. Ten gets Neighbours cheap (it is produced by Fremantle for 5 and Ten) and CBS’ move on Ten should keep the show alive for a while longer.

Viacom TV channels such as MTV, Nickelodeon, Nick Jr, Comedy Central, etc. Viacom is the other bit of CBS that controls a host of cable channels and Universal Studios and Paramount. (Ten already has access to a lot of Paramount/Universal product). CBS’s biggest cable channel is Showtime. Content from some of these could quite easily appear on Ten’s digital channels aimed at specific markets: kids’ TV, TV for teens, and young millennials.

Sour grapes from News Corp papers, especially The Australian? News Corp wants the media ownership and control and reach laws to be changed and approved by the Senate, but the price of that is allowing a very large cuckoo into the Ten nest in the shape of CBS. That might bring more pain and sorrow for the Murdoch clan. So, will News Corp papers attempt to play the foreigner card (i.e. CBS is American) while avoiding mentioning that News Corp is American, as is the Murdoch family?

And lastly: is CBS taking a step too far? Through its executives on Eleven Co CBS had a very good understanding of the local market and local TV programming ideas and preferences — especially how the easy days of buying in a big hit or two from the US is no longer a viable strategy (as it was for Seven 13 years ago when it brought Lost and, especially, Desperate Housewives). Facebook and Google and Netflix are changing the rules for media, but CBS knows all about that in the more competitive US market.

It will be quite a ride.