Nine Entertainment Co boss David Gyngell said he can see value in media groups Discovery Communications and Foxtel making a joint bid for Ten Network because they could feed their content through the free to air broadcaster's "pipes".
Mr Gyngell told Fairfax Media Foxtel would be interested "for the same reasons" Nine would be interested in Southern Cross Media's television business "because we would put our content down those pipes and generate profits". Nine made an aborted takeover attempt on Southern Cross in 2013.
But Mr Gyngell, speaking after the television-to-events company's annual meeting last week, said he could not see the same value for a private equity buyer or a hedge fund in Ten "unless they had a silver bullet in management that we did not know about".
Foxtel is working on potential joint takeover of Ten with America's Discovery Communications. The pay-TV giant would hold 14.9 per cent of Ten, with Discovery taking the rest. The consortium is frontrunner in an auction being run by Ten's adviser Citi with deadline on December 2 for indicative bids. No deal may eventuate. Fairfax Media revealed on Monday that the pair are planning a dual-class shareholder structure for Ten to convince billionaire Bruce Gordon and any other resistant investors to sell.
Nine and Seven are prohibited from acquiring Ten because ownership laws prevent anyone from holding more than one metropolitan TV licence in the same market. But Mr Gyngell said: "I definitely think Nine and Seven should have the opportunity to do the same thing as Foxtel. I wouldn't want to buy Channel Ten but I think all [media] rules should be removed bar anti-siphoning."
His sentiments were echoed by Seven West Media chief executive Tim Worner. Asked last week, whether he thought Seven should be able to buy Channel Ten, Mr Worner quipped to the Screen Forever conference: "Well… why not? That's all I'd say. Why not? It'd be fun."
But he differs to Mr Gyngell, who believes Australia may not be big enough to sustain three commercial free-to-air networks. "What we have seen over the last couple of years is an anomaly situation where one of the competitors [Ten] has been less than competitive and in quite extreme circumstances. We are doing our best to make sure it's hard to get back. That's what we do. But I do see that there is a way back [for Ten]."
