Lachlan Murdoch's Network Ten to Begin Layoffs
Staff members face pink slips as the company finds $18 million in savings.
SYDNEY -- 180 Ten Network Holdings employees -- 12% of the broadcaster’s workforce -- are facing pink slips, following a six-month strategic review initiated by interim CEO Lachlan Murdoch, it was announced on Monday.
The review, which identified cost savings of up to AUS$18 million ($19 million), means the network will keep costs at the same level as the 2010/11 fiscal year but will book AUS$48.3 million in non-recurring charges to implement the savings .
As a result Ten, the third-ranked commercial broadcaster, said that its full year earnings before interest, tax, depreciation and amortization will be about $179 million, with TV earnings at $160 million. TNH will release its financial results for the year ending Aug. 31 on Oct. 20.
Ten’s television division has had a mixed year to date: while the third season of Masterchef in total was down slightly on the previous two seasons – still delivering Ten over 1.4 million viewers across five weeknights -- the audience for the shows finale 10 days ago was down over 30% on the record ratings of 2010.
But its been the failure of big ticket home renovation show, The Renovators, produced by Masterchef creators Shine Australia to build audiences on a level comparable to Masterchef that has the network now being forced to offer "make goods" to advertisers.
The detail of Ten's cost cutting, made after the close of trading yesterday, comes just two days before Murdoch and Ten’s chief programming officer David Mott, host Ten’s annual upfront presentation for advertisers and media, at which it will outline its 2012 programming line-up.
Murdoch said Monday that cost savings of $19 million will allow for $50 million to be re-invested in programming content for the coming year across the network’s three channels: Ten, One and Eleven. Ten has output deals with 20th Century Fox and CBS Paramount.
The one-off non-recurring charges cover staff redundancy costs for both the Television and Out-of-Home divisions, and program write-offs.
They also include court ordered costs to the Seven Network and the legal costs for incoming CEO James Warburton for the action Seven took when it was announced that Warburton, then sales director at Seven, would join Ten.
Ten said that its expects to show TV revenue growth of 2% on fiscal 2010 and total cost growth of 9% on the previous financial year, when it reports its full financial year results to August 31.
In the ratings year to date Ten’s all people network share is 22%, breaking down into shares of 16.8% for its primary channel, 3.4% for youth channel Eleven and 2% for male skewed channel One.
Commercial TV revenues figures released by Free TV Australia last week showed that Ten’s share of the $1.9 billion of Australian TV revenues in the first half of the calendar year grew to 28.85%, up from the previous half’s share of 27.5%.