Discovery Walks Away From Auction for Australia's Ten Network

David Zaslav

Discovery Communications boss David Zaslav made $49.9 million in 2012, slightly below the $52.4 million that he had earned in 2011. But that was enough to see him yet again rank just behind Moonves in terms of compensation for bosses of big entertainment companies. The year-over-year drop was due to changes in the value of his stock options, even as the company’s shares rose more than 50 percent last year.

The company was looking for control of Ten in a joint bid with Foxtel, in which News Corp owns a 50 percent stake, but the board offered only a minority stake.

Discovery Communications has walked away from the auction for Australia's Ten Network, sources confirmed.

The TV networks company, led by CEO David Zaslav, last year made a joint bid for the broadcaster with pay TV operator Foxtel in which Rupert Murdoch's News Corp owns a 50 percent stake. The partners recently lowered their bid price.

The Australian Financial Review reported that Discovery was opposed to the Ten board's alternative suggestion that it and Foxtel take not a controlling stake, but only a 14.99 percent stake each. The report said that Foxtel still has to decide whether to walk away, find a new partner or acquire a 14.99 percent stake on its own.

Ten's biggest shareholder, billionaire Bruce Gordon, has pushed for an alternative deal to inject up to $175 million into the company. It would also give him convertible stock that would allow him to increase his stake in the beleaguered network should Australia’s cross-media ownership laws be changed.

Gordon owns a 14.9 percent stake but is prevented from moving beyond 15 percent under the Australian government's media-ownership rules. Other Ten shareholders include 21st Century Fox and News Corp co-chairman Lachlan Murdoch and casino mogul James Packer, who jointly own a stake of close to 18 percent.

The companies declined to comment. Ten airs such U.S. ratings hits as Empire and NCIS.

Twitter: @georgszalai