CBS scoops up Australia’s troubled Ten Network

CBS chief Leslie Moonves called Ten Network a "prime" asset and said the valuation "gives us confidence" in profitability.

CBS said it will acquire Australia’s third-largest over-the-air broadcaster, Ten Network, planning to use it as an overseas platform for its owned shows as well as the CBS All Access streaming service.

The deal saw CBS outmaneuver Australian media executives Lachlan Murdoch and Bruce Gordon, whose own bid had been tangled up in regulatory issues given their other Australian holdings. Murdoch is co-chairman of News Corp. Terms were not disclosed.

In addition to Ten’s linear channel, the deal includes digital terrestrial channel Eleven, of which CBS already owns a 33% stake. It also includes Tenplay, Network Ten’s digital streaming service.

The streaming opportunity is the biggest upside of the acquisition. It marks the second international territory expansion for CBS All Access. Earlier this month, the company said it would launch in Canada in the coming months.

Ten has been at sixes and sevens of late. It entered receivership in June, after reporting a loss of about $200 million for the first half of the fiscal year. It has lost money for the last five years.

In a press release, CBS chairman and CEO Leslie Moonves called Ten “a prime broadcasting asset with over half a century of experience and brand equity.” While terms of the deal were not disclosed, Moonves added, “We have been able to acquire it at a valuation that gives us confidence we will grow this asset by applying our programming expertise in a market with which we are already familiar.”

Like its U.S. TV rivals, CBS has been pushing to own more of its own content. Global hits like Hawaii Five-O have increased international content licensing revenue to $1.5 billion in 2015, triple the level 10 years earlier.

In addition to licensing its own shows, some of which can now be produced in locally specific versions, the deal gives Ten more muscle in terms of live sports. And Down Under, sports means cricket. Cricket Australia’s Big Bash league, currently a $20 million commitment, could require $60 million when the deal terms are reset in 2018.

The deal still must clear a couple of hurdles, winning approval from creditors and Australian regulators. But Australian Prime Minister Malcom Turnbull has come out in favor of the transaction. A pact with CBS, he said, “would be in the interests of the network, its employees and, of course, its viewers.”