A heads-up from Pleiades gave me this wonderful view of how a company purporting to be a Film & TV production company soaked up millions in investor funds and then hurriedly went into receivership.
Pierpont never watched the sitcom, Hey Dad, so his withers were unwrung last September when its lead actor, Robert Hughes, was charged with sexually assaulting children.
Your correspondent has no idea whether Robert is guilty or not. However, while the authorities are at it, they might take a look at his wife’s company, where the wallets of investors have been getting assaulted a bit for the past couple of years.
Robert is married to Robyn Gardiner, who is quite a movie celebrity in her own right. In 1982 she set up Robyn Gardiner Management, attracting a galaxy of 300 clients including Cate Blanchett, Sigourney Weaver and Lisa McCune.
In 2005, Robyn moved her RGM group to Singapore to expand into Asian movies and TV.
In 2010, RGM Media listed in Australia. Since then it has burned through some $14 million and gone into administration without – as far as Pierpont can ascertain – ever producing a single movie or TV show.
Pierpont then goes into great detail as to what tipped him off that Robyn Gardiner's outfit was headed for financial disaster. What's amazing is that the adventure also sucked in S$27.5million of the Singaporean government's money - and once again we reiterate, without having made a single film.
The business side o the film industry can be quite opaque to outside observers, what with all these different types of 'producers', but in a nutshell it comes down to finishing up with a product on a certain date and delivering it to the market in the manner desired by the exhibitors. It goes without saying that the content has to be good and compelling; but also the films have to be able to go into other ancillary markets.
It's really hard to make money back from the market if you don't make a single film and call yourself a production company, while pulling down studio exec paychecks. Naturally, it follows that we have to be suspicious of the people involved, whether they really had any intention to produce any films, or not as the case may be. Without accusing anybody of anything, the track record described does make one wonder as to where exactly the priorities of the executives of RGM sat, given that inglorious track record.
Faking Bad
One understands that the free-to-air TV business is under great strain, like at no other time in the relatively short history of free-to-air television, with business models crumbling and advertising revenue plummeting. In that light it seemed rather odd that Lachlan Murdoch and Jamie Packer put themselves on the board of the Ten Network. Under their ownership, Ten has sunk from about $1.50 a share to 33cents. Some unkind people have been calling the Ten Network 'Two.Tel' and 'Ten.Tel'.
You get the drift.
Today, I found this article in the SMH that led me to think maybe this wasn't entirely unplanned.
A report released on Thursday by BBY media analyst Mark McDonnell boldly states: ''We do not accept the chairman's [Lachlan Murdoch's] description of this raising as 'prudent' - a better term would be excessive, given the resulting net cash position and the practical effect of almost halving the value of shares from already historic lows due to the massive dilution.''
McDonnell believes Ten's latest equity raising - the second in six months - could well be a form of creeping privatisation by a few ''insiders''.
It is an interesting theory, given the equity issue will thrust Ten from a net debt position to a net cash position. On the face of it the move seems extreme, given it has been achieved at a massive 38 per cent discount that will result in up to 2.5 billion shares on issue.
Billionaires Lachlan Murdoch, James Packer and Bruce Gordon, who collectively control 32 per cent of the company, have agreed to support the latest $225 million equity issue. The other billionaire board member, Gina Rinehart, who turned up 45 minutes late to Ten's annual meeting on Thursday, has opted to keep everyone in the dark about her intentions.
As of this writing, Gina Rinehart has joined the other billionaires, so she too is playing ball. What if the billionaires were indeed planning on privatising the Ten Network and having decided on that course of action, gone to own trying to drive the share price down by driving the business into the ground? Could this even be possible?
You could see the motive, but that alone doesn't prove anything. They have the means to do such a thing, and sure enough the share price for Ten has gone down steadily in the last 24months. You'd be hard pressed to say the possibility wasn't there.
No comments:
Post a Comment