TEN (ASX) Media industry’s future is about to fall into Pauline Hanson’s hands

Originally posted by Galba ↑

For every person, or even millennial who doesn't watch FTA I can find some who do... Anyway let's put these tyre-kicking statements to one side for a minute.

Is TEN a risky proposition? On balance yes, but one with a certain level of risk appetite would reasonably think after being $1.40 vs 16.5c now then the reward outweighs the risk imo.

Let's get to the facts
- TEN still did revenue of $689m FY16 - HY17 revenues increased 2.1%, as did market share. However, costs did not
- Nobody is debating the license fee should not be cut. This equates to $23m of revenue back to TEN, which on a HY predicted loss of $25-30m, suddenly this becomes $2-7m loss.
- TEN is still aggressively trying to lower cost base. Note an administration effectively leaves TEN to withdraw from all it's overseas content deals. Which given NewsCorp & CBS invovlement here, they would want to avoid.
- The market cap is now $60m which is the same price near to what WIN NSW was sold for.
- Net debt is 30m, on total current borrowings of 73m
- The broadcasting license is still valuable ($188m, down from $410m, but probably needs to come down again)

But the biggest fact here is that the big media moguls, of Bruce Gordon, NewsCorp and Foxtel have all guaranteed this debt, and are owed their $29m in fees.

I am backing self interest here. I would bet my bottom dollar that there is intense lobbying going on with ONP, but even on a worse case scenario the libs can easily ditch the 2/3 rule, and re-package the reforms to include the fee reduction. It is unforunately not in TEN's interest to resolve this debt issue until someone blinks...

Anyway, I think 15c will be an interesting level, and let's keep tight stops and see what happens... The risks are huge.. GL to those in it

@nytryda thought you might want to see this mate. @accaeric are you still holding? or stopped out?

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thanks for this Galba. just trying to get to the bottom of the proposed licence fee cut.

i don't think Ten would save the whole $23m, that is currently based on 3.375% of tv revenue. i read that the proposed regime is a spectrum fee around $40m fixed for the whole industry, so Ten would cop a share of that based on usage of total spectrum. i don't have these numbers but taking a pure guess say if its 20% (one fifth of the five major channels) then still have to pay $8m. does anyone know Ten's actual share of MHz?

should still be a healthy saving, good luck all