By Joe Montero

The stock exchange has stopped the trading of Ten Network Holdings shares and the company has gone into voluntary administration.

This is the broadcasting company owned by the James Packer, Lachlan Murdoch, Bruce Gordon and Gina Rinehart quartet, who have by all appearances blown hundreds of millions of their own dollars. They have also overseen the destruction of hundreds of jobs and some seventeen thousand small shareholders have been left high and dry.

Something doesn’t quite add up.

Behind the scenes, there is a complex game of cross deals going on. The billionaires controlling Ten have their fingers in more in more than one pie of the complex media network over Australia. They are playing a chess game to get control of the most lucrative contracts, tied up with foreign media outlets. For instance, much of the high earning television programming is made in America. The front running is being made by Fox related companies, including Foxtel, which is firmly in the grasp of Murdoch’s Newscorp, in partnership with Telstra.

Ten fits in, because many of its highest rating shows, like The Biggest Loser, MasterChef, The Bachelor and are owned by 21^st Century Fox, which is a Murdoch company or by Endemol Shine, in which Murdoch has a 50 percent share. Another Murdoch owned company, Fox sports, supplies much Ten’s sporting coverage and a Foxtel subsidiary, MCN takes care of the advertising sales.

A $200 million loan facility granted by the Commonwealth Bank is guaranteed by Murdoch, Packer and Gordon. Although only $66 million of it has been drawn, the facility has helped to consolidate their influence over company operations. On top of this, the incentive to claim the debt, has probably sped up going into voluntary administration.

The connection between the bigger picture of what is going on and the billionaires, entwined with Murdoch interests, is that they could use the money put in by shareholders to sign up contracts that transfer funds into Murdoch companies and bleeding Ten to its knees, has created a situation where, Murdoch can move in and take control of the lot at a bargain basement price.

The billionaires stand to come out on top, because they are likely to be to have their monetary losses offset by a bigger slice of equity in the new revamped Ten Network Holdings or another company in the Murdoch stable.

It is the small time investor who will be paying for it.  The Australian Shareholders Association’s CEO, Judith Fox, argues that independent directors should be added to Ten’s board, because of existing conflicts of interest.

“Given the substantial conflicts of interest and potential related party transactions at play, ASA believes Ten needs to immediately move to a conventional board with most of, many of independent directors,” she said in a statement yesterday.

She added that “For that to happen, Ten needs to quickly add two new independent directors so the independents have a majority and can out-vote all of the conflicted directors if necessary to ensure the interests of minority shareholders are protected and conflicts of interest are appropriately managed”.

There are long term prizes that the Murdoch empire is angling for and events at Ten fit into this. The fall happens right at the time when the issue of cross media ownership is due to come up before parliament. Murdoch has spent a long time cultivating political support to change the rules so he can own and control more. Sending Ten to the ropes will be used as pressure to enable a direct takeover, of a company that is too big to allow to fail.

Even more important, is the ambition to consolidate even more political clout to move in on the National Broadband Network. The strategy has always been, to push for its eventual privatisation, when Murdoch is able to take it over. By this means, cross media ownership laws may be relaxed.

The importance of this is that digital media is the future. It has already made a hole in traditional broadcasting, print and radio media and the National Broadband Network is at the centre of the future expansion of digital news and social media. Whoever controls this, will enjoy a new monopoly and as a profit earner, it will be a goldmine.

What about the future of Ten? At the worst, it will collapse into Foxtel, which will acquire its assets. The alternative is that will continue, but locked in solidly as part of the Murdoch empire.