Channel 9 financial woes

[subsbligh]

Very interesting developments recently with Channel 9 apparently in some financial dramas.

http://www.brisbanetimes.com.au/business/channel-nine-on-brink-as-banks-circle-20120925-26jpx.html

I wonder what the terms and conditions are for the broadcasting rights deal? I wonder if the NRL were smart enough to negotiate a "change in control" get out clause if Nine was to be sold or restructured.

If 9 went belly up tomorrow, curious if the $900M the NRL has already received would be clawed back as a preference payment.

Lot's of very intriguing issues if Channel 9 was to enter into liquidation. My only hope is that it's not another hiccup for the NRL and then being forced to negotiate with other broadcasters at fire sale rates.

 

[Kimlo]

I too am concerned at the possibility of them going belly up resulting in league not getting the money it signed for... That would be devastating.

 

[Nashy]

I do reckon the powers that be are a little worried. It has the potential to completely devalue the game.

 

[Huge]

It's inconceivable that Channel 9 did not know that they were under the pump financially when they negotiated the deal with the NRL. Each one of us knows how much money(or debt burden) we have at any given time. If, for example we were considering buying a new car we would know exactly where we stood financially and certainly would have a very clear idea as to whether or not we could afford the purchase.

Most of us are not financial experts but that sort of knowledge would be plainly obvious, even to us. A near billion dollar purchase would have to be well researched and understood and Channel 9 must have employed some financial expertise before even contemplating the deal. I find the news staggering and wreaks of duplicity and must be fully investigated. How could such a deal be even considered if the management was aware of the parlous state of the finances and if they plead ignorance ,then surely it most be the most incompetent team of managers in television history.

 

[Ari Gold]

League is a ratings winner and nine arent making a profit. Not hard to see why they would want our rights.

 

[Kimlo]

League is a ratings winner and nine arent making a profit. Not hard to see why they would want our rights.

I guess what concerns me is if they do go bankrupt and can't pay up then league is absolutely screwed.

 

[Kaz]

Channel 9 won't go belly-up.

They have been in financial strife for years.

 

[Dexter]

The RLcommission was fully informed during negotiations of the debt issues Ch 9 were facing. Apparently they did there research and were satisfied with what they found.

Also I heard a report early last week that our deal was guaranteed.

There is no way the lenders will want to put 9 out of business because nobody wins. A deal will be done and it will be business as usual as far as the viewers are concerned.

 

[Huge]

Just curious Dexter, and not arguing, but where would I find confirmation that the NRL knew of the state of 9s finances. Normally, that sort of information is kept very private. I have no doubt a deal will be done , it always is in some shape or another. No surprise there. You still have to wonder though, if you know in advance that the intending purchaser is in financial strife there really could not be a guarantee. There must be more to the story than what we have been told.

 

[subsbligh]

Channel 9 won't go belly-up.

They have been in financial strife for years.

That's what they said about Ansett.

 

[subsbligh]

Just curious Dexter, and not arguing, but where would I find confirmation that the NRL knew of the state of 9s finances. Normally, that sort of information is kept very private. I have no doubt a deal will be done , it always is in some shape or another. No surprise there. You still have to wonder though, if you know in advance that the intending purchaser is in financial strife there really could not be a guarantee. There must be more to the story than what we have been told.

That's the point. There's only so much information you can obtain publically about the financial position (even of a public company) and most of the time you have to rely (trust) what you're provided with.

I imagine a well advised NRL would have sought parent company guarantees (i.e. from PBL), rights for termination for insolvency events, warranties about the financial position of the company, restrictions on change in control of Channel 9 etc etc.

Still, those things would at best give the NRL the right to get out of the Channel 9 contract and recoup some of its damages by calling on the guarantee (which is a shit fight in the best of situations anyway).

None of those things protect the NRL from having to go back to market where everyone knows that they are desperate for a new broadcaster and Channel 7, Fox or Channel 10 getting a bargain and the NRL getting screwed.

And more culpable if the deal went to shit would be the NRL commission for not doing their due diligence because the lure of the $1BN deal and the subsequent kudos they received...

 

[Nashy]

Channel 9 won't go belly-up.

They have been in financial strife for years.

Now re-read what you said, and let me know if you still don't realise how stupid that comment is.

The fact they have been in trouble for years is the issue here. The creditors are over it.

 

[Kaz]

Gotta love this forum.

The sky is falling.

 

[Coxy]

Well I think league fans have cause to be concerned. If Channel 9 falls in a heap the TV deal is null and void basically. Taking them out of the picture leaves us with only channel 10/7 showing any interest. We'd be in the same boat as previous contract negotiations where there's only 1 party interested so they dictate terms.

 

[Nashy]

Gotta love this forum.

The sky is falling.

Your argument is invalid since you provide NO facts.

 

[Dexter]

Just curious Dexter, and not arguing, but where would I find confirmation that the NRL knew of the state of 9s finances. Normally, that sort of information is kept very private. I have no doubt a deal will be done , it always is in some shape or another. No surprise there. You still have to wonder though, if you know in advance that the intending purchaser is in financial strife there really could not be a guarantee. There must be more to the story than what we have been told.

I heard about Ch 9s financial situation on Greg Careys talk show last Wed or Thurs. He asked specific questions relating to the NRL deal and that was the answer. The deal is guaranteed and that the NRL ppl negotiating were fully informed of the debt position all the way through. I found this below.

I can't see Ch9 folding because nobody wins particularly the debtors. I think some type of debt restructure will be agreed upon and the debt repayment date pushed to a future date giving Ch 9 time to restructure their business.



NRL comfortable in deal with debt-ridden Nine
BY: STUART HONEYSETT From: The Australian September 26, 2012 12:00AM

THE NRL says it remains confident that its $1.025 billion broadcast rights deal will be honoured regardless of the outcome of talks between the Nine Network and its creditors.

"We've got a contract with Channel Nine and it's a binding contract so we're comfortable with our relationship," NRL interim chief executive Shane Mattiske said yesterday. "We know how important we are to Nine and clearly that will be understood by all the parties involved behind the scenes at Nine as well."

The network is hoping to refinance the debt but yesterday's talks concluded with no resolution.

Mattiske said the NRL had been aware of Nine's financial plight before it signed off on the deal last month. The Ten Network was also keen to secure the rights while there was also interest from Seven before the league chose to remain with Nine.

"We spent a lot of time during the negotiation process understanding the complexities that sit behind the Nine Network's investment and debt structure," Mattiske said. "That work allowed us to have comfort and certainty.

 

[subsbligh]

"We spent a lot of time during the negotiation process understanding the complexities that sit behind the Nine Network's investment and debt structure," Mattiske said. "That work allowed us to have comfort and certainty.[/b]

Yeah but Gygnell strikes me as a cowboy.

Wouldn't be suprised if he took a punt (even in a bad financial position) on the NRL broadcasting rights to save the business.

Hell Channel 9's financing might even be conditional on it securing broadcasting rights - who knows how reliant 9 is on the NRL rights?

 

[Nashy]

I highly doubt they are hoping the NRL will some how dig them out of financial issues. I mean, they've had the game from a time when they were making tonnes of cash. Not to mention if they wanted NRL to save it's ass, it wouldn't **** with the fans and actually play more live games.

In saying that. Why the **** would Nine share the inner workings of their credit procedures with them. I reckon that sort of information is very much confidential for any company, small or large.