Lachlan Murdoch Named Interim CEO of Ten Network Holdings
SYDNEY -- The board of Australia's Ten Network Holdings has sacked CEO Grant Blackley and installed Lachlan Murdoch as interim CEO, after preliminary financial results for the first half of the broadcasters fiscal year Wednesday showed a fall in earnings, despite a recovery in the wider ad market.
Part of Murdoch's remit as interim CEO will be to undertake a strategic review of all of Ten's businesses.
In a statement, Ten said that Blackley, the long-term chief executive of the company's television division, had been given notice that his contract would be terminated immediately.
"At the unanimous request of the board, Lachlan Murdoch has agreed to accept the role of acting chief executive officer during the period that an executive search is undertaken for a new chief executive officer," the company said.
Sources close to the company said Murdoch would not take on the job permanently.
"The Board continues to be responsible for all decisions regarding the strategic direction of the Company, and has decided to conduct an immediate strategic review of the Company's operations," Ten chairman Brian Long added.
The company reported that preliminary financial results up to February 28, are forecast to show group earnings before interest, tax, depreciation and amortisation (EBITDA) to be approximately AUS$103 million against the previous corresponding period results of $117 million. Television EBITDA is expected to be $92 million down from $109 million, with revenue growth of 2% on the prior six month period.
By comparison industry estimates revealed this week show that free to air TV revenues grew 16.6% in the 2010 calendar year, indicating that Ten was unable to capitalize on that growth.
Long told local media: "The cupboard is bare at Ten. In reality, they did the best job they could to try to hold on to some earnings for the board and the shareholders. I don't think anyone can do any better without blowing the profits."
Blackley's termination follows a period of upheaval on Ten's share register last year when Murdoch joined James Packer in buying up 18% of the company and getting two seats on the board. Ten's then executive chairman Nick Falloon, subsequently resigned from the company.
Australia's richest woman, mining magnate Gina Rinehart Packer and Murdoch onto the share register, with the acquisition of a 10% stake in Ten, while industry veteran Bruce Gordon retained a 14% stake.
At the time it was widely reported that Packer, whose father Kerry was the longtime owner of the Nine Network here, was unhappy with the performance of Ten on a number of fronts including its digital sports channel, One and the networks strategy to rebuild its early evening audience by running a two and half hours block of news programs from 5 – 7.30pm and moving shows like Neighbours and The Simpsons to its new younger skewing digital channel 11.
Ratings for Ten's news services in the highly competitive 6 – 7pm slot have been well below expectations since their launch three weeks ago.
While the strategic review will look at all elements of Ten's business, including its out of home business, its unclear how deep the review will drill and if Ten's output deals and its joint venture with CBS, Eleven Co, to provide content to digital channel 11, will come under the spotlight.
Indeed the network's most recent deal, announced last week, was a minimum three year contract for the rights to and production of the country's number one TV show, Masterchef, with Elisabeth Murdoch's Shine Group.
News Corp., on whose board Murdoch sits, earlier this week said it would buy the Shine Group for $613 million, with Lis Murdoch to join the News Corp. board.
Murdoch holds his Ten stake through his private investment company Illyria Ltd.
Ten is the third ranked commercial network in Australia, and finished the ratings year last year with a 21.2% network share, behind the Seven Network with a 28.7% share and Nine with a 27.6% share.