Major Australian TV company Ten Network said Wednesday it had appointed voluntary administrators as it struggles with debt and shrinking advertising revenue.
The board of Ten Network Holdings Ltd. decided to appoint the three administrators after two of the network's billionaire backers, Lachlan Murdoch and Bruce Gordon, advised last weekend they were not prepared to guarantee a new 250 million Australian-dollar ($189 million) bank loan when a current AU$200 million loan is due to expire in December.
The decisions of Murdoch, son of News Corp. chief executive Rupert Murdoch, and Gordon "left the directors with no choice but to appoint administrators," Ten said in a statement to the Australian Securities Exchange.
"This decision comes despite the Ten Group making significant progress to realize the potential sources of improvements to future earnings" identified in a recent directors' report, the network said.
The administrators will decide whether Australia's third most popular commercial television network can continue trading or should be shut down.
"The directors of Ten regret very much that these circumstances have come to pass," the network said.
Communication Minister Mitch Fifield said the government would introduce legislation into Parliament on Thursday to change Australian media ownership laws which were drafted in the 1980s to ensure media diversity.
"The Ten Network is a wakeup call for opponents to media reform and the Ten Network has been at the forefront of those arguing over the last 18 months that we need precisely the sort of media reform package that the government is putting to the Parliament," Fifield told reporters.
The government plans to remove a ban on a single company owning a TV station, radio station and a newspaper in one city. Companies can own any two but not all three. The government also wants to lift a prohibition on a single company having a license to broadcast to more than 75 percent of the Australian population.
The opposition Labor Party is concerned that the changes would lead to a greater concentration of media ownership.
"The greatest threat to the diversity of the Australian media would be an Australian media organization that didn't continue, that went out of business," Fifield said.
"We want to unshackle Australian media organizations so that they've got more options as to how they configure themselves and how they can be viable long into the future," he added.
Ten shares were placed in a trading halt on Tuesday.
In October, Ten posted an AU$156.8 million loss for the year through August, driven by a AU$135.2 million writedown in the value of its broadcast license, a tough advertising market and mounting costs.