A little over 56 years ago Bruce Gyngell announced “Good evening, and welcome to television” on Sydney’s — and Australia’s — first television station, TCN9.
For the past few days, his son David Gyngell, as CEO of Nine’s parent company Nine Entertainment Co., was at the forefront of the company’s bid to stay out of receivership despite it owing lenders over $3 billion.
Yesterday, a beaming Gyngell — who also became a new dad earlier the same day — announced that Nine was ‘back in business’ after coming to a deal with the lenders and avoiding the threat of administrators moving in:
“Nine’s back! And back in a huge way with zero debt, which is the best possible news for our stakeholders – Nine’s viewers, our clients, our partners and our staff. As I’ve reiterated throughout this process, Nine is a great business with terrific people and outstanding brands.”
“This historic agreement positions us for unrivalled leadership and I cannot wait to lead the Group into an exciting 2013 and beyond.”
“It’s been a long and often tortuous process and to all the parties I say a big thank you — because the outcome is the best imaginable result.”
Nine Entertainment Co chairman Peter Bush said the deal gives the company a strong financial position:
“We believe this is an outstanding outcome for all stakeholders. The business has great momentum and strong cash flow, and now it will have the strongest balance sheet in the industry. It puts the company in a remarkable position to build on the successes of 2012.”
The deal effectively sees control of Nine Entertainment Co — including Nine in Sydney, Melbourne, Brisbane and Darwin, NBN in Northern NSW and part-ownership of Australian News Channel (Sky News Australia) and Mi9 (NineMSN) — go from its previous owners CVC Asia Pacific, who bought the company including a certain amount of pre-existing debt from James Packer in 2007, to the hands of the major lenders led by US hedge funds Apollo and Oaktree and Goldman Sachs Mezzanine Partners.
Had negotiations failed and the company fell into receivership it would have been a disastrous blow to Nine and potentially undone the ratings successes it has enjoyed this year in closing the gap with rival Seven for the first time in years.
Receivership could have also jeopardised any existing contracts in place with Nine — such as the recently-signed $1 billion deal (in partnership with Foxtel) to cover NRL for the next five years — and any chances of bidding for future broadcast rights such as the cricket.
It’s not to say that the tough times are behind Nine as a business — the new owners will still be looking to cut costs and shoring up the company’s value with the view to a possible sale in the long term — but it can move into the new year with a level of optimism and a sense of stability.
Earlier this month Nine Entertainment Co completed the sell off of magazine publishing business ACP Magazines to German publishers Bauer Media Group for an estimated $500 million.