Three generations of Australians have welcomed the Nine Network into their homes. Graham Kennedy, The Sullivans, World Series Cricket, Brian Henderson, Here's Humphrey, Paul Hogan, Sale of the Century, Kerri-Anne Kennerley, Bobby Limb, Hey Hey It's Saturday, Skippy and a thousand other programs and personalities wove through Australian lives for years.
But final confirmation this week that Nine was heading for bankruptcy still came as a surprise. After all, the network had enjoyed renewed ratings success with The Voice, the London Olympics and the Underbelly series.
And even in the midst of looming financial disaster came Howzat? Kerry Packer's War, a cartoonish, wistful reminder of the glory that was Packer.
Nine screened the mini-series on the back of its Olympic coverage. The hero-worshipping drama was an unintentional strangely sad counterpoint to the shenanigans of the suits and bankers who own the network. CVC Asia Pacific, the private equity player that paid more $5 billion to James Packer four years ago for Nine, now looks like a gormless new chum.
CVC was forced to acknowledge this week it had ''boned'' itself. Under private equity, Nine had been turned from a successful entertainment enterprise into a business black hole, crushed by debt, and CVC is talking with the hedge funds that control Nine's debt to try to save the network. Creditors were warned that putting the network into receivership would jeopardise sports contracts, including the record $1.1 billion deal with the National Rugby League.
Australia's media families and oligarchies historically shared the tenet that
monopoly is profit. While money men worry about the bottom line, the nation's media moguls have always understood the importance of speaking directly to the politicians who control their monopolies through legislation.
Packer famously said when he sold Nine in 1987, ''you only ever get one Alan Bond in your life and I've had mine''. As the Labor government changed the rules to allow the sale, he should have added, ''you only get one Paul Keating in your life and I've had mine''.
Packer reclaimed his birthright, re-acquiring Nine at a knock-down price in July 1990. He was certainly grateful. He backed Keating in the 1993 election: The prime minister climbed all over John Hewson in a debate that degenerated into a free-for-all refereed by Mike Willesee in the Nine studio.
The media families never hesitated to bend politicians to their will, something now not available to private equity players. But the Packer's naked chutzpah in pursuing that goal was especially rapacious.
An example of how they play to win came in 1998 when digital television was just over the horizon.
The Packer family wanted pay television operators such as the Murdochs kept at bay and was lobbying John Howard's government to give its Nine Network a few more years in the profitable free-to-air sunshine before the digital spectrum was opened to other players.
James Packer had been installed as managing director of Publishing and Broadcasting Limited two years before, and although bored with print and electronic media, he did his father's bidding and oversaw a cover story in the Bulletin magazine via one of his executives, Andrew Robb.
Now a federal MP, in 1998 Robb had recently joined the Packers after nine years as director of the Liberal Party. He had managed Howard's successful 1996 election campaign to thrash Keating.
The Bulletin was in the kind of twilight that accompanies a slowly ebbing readership but the magazine was a Packer tool of influence and the family wanted a piece explaining the digital television divide to the largely ill-informed Coalition party room. Robb nuanced the piece to fit his bosses' demands.
A month later the Howard government gave the free-to-air networks a 10-year monopoly on digital television. Once more the Packers had prevailed.
This week Nine management met representatives of US hedge funds Apollo and Oaktree and banker Goldman Sachs, and consensual agreement must be reached by the middle of next month or the administrator will be called in.
The Communications Minister, Stephen Conroy, does not believe it is the end of the line for Nine.
''In terms of the survival of Channel Nine as an entity, I am sure Channel Nine will keep beaming no matter what the circumstances of its ownership and I am sure we will see these issues resolved over the next month or two,'' he says.
The author of the 2007 book Who Killed Channel 9? The Death of Kerry Packer's Mighty TV Dream Machine and the first executive producer of Sixty Minutes, says there is still a good living to be made from television, with $3 billion just waiting to be taken from advertising agencies.
''They used to say television stations were a licence to print money,'' he says. 'They still are, but not if you borrow too much to start with. There are people out there who could be interested in buying at the right price … John Singleton might be one, he was looking at a fourth channel.''
Stone says the Nine chief executive, David Gyngell, had been ''doing a good job of bringing back the old mojo it used to have'' to the station, and attracting new viewers, but the cost of programs was too much.
''But it was a kind of suicide,'' Stone says. ''With all that debt they were still buying very expensive properties.''
Australians are no longer riveted to their sets. When Kerry Packer was alive nine out of 10 households watched. Today only six or seven out of 10 bother to turn on the box.
Two of the three Australian commercial networks are in debt trouble and while that has been hardly a deterrent to supposedly conservative banks lending money big time to television entrepreneurs, Stone says the government has to take responsibility for the current crisis.
''It's a protected industry. It's a form of monopoly. It's an outrage how the free-to air channels have been protected by not having another network and people can buy in or buy out. If it was allowed to run itself, these properties wouldn't be worth so much.''
Governments, both Coalition or Labor, have always loved commercial broadcasters and amended legislation as required by the moguls. Even before television began, the moguls had their feet in the front door.
In 1953 the Menzies government established a royal commission into television but not before amending legislation to permit the licensing of commercial television stations ''on the same fundamental basis as has been so remarkably successful in respect of sound broadcasting''.
Many objected. Some wanted the newfangled television service to be a government-only affair, or at least keep the privateers out for a few years.
Said the then ABC chairman, Richard Boyer: ''Commercially there is a natural urge to fill all possible hours with material of some sort for time is the product sold. This inevitably leads to the inclusion of vast amounts of material which is inferior and sometimes distinctly harmful.''
However, the royal commissioners neatly sidestepped the issue of the desirability of commercial television in Australia, saying that although it was a matter that had caused great concern to large sections of the community it was not included in their terms of reference.
Commercial radio broadcasters, newspaper proprietors and television set manufacturers laughed all the way to the bank when the Royal Commission ignored the blandishments of Boyer and others and announced one national station and two commercial licences in Sydney and Melbourne.
Frank Packer got the TCN-9 licence. The Fairfax family got ATN-7. In Melbourne, the Herald and Weekly Times was given HSV-7 while a consortium including David Syme, publisher of The Age, radio stations, a theatrical company and an electronic company received the GTV-9 licence.
In 1960 Packer acquired GTV-9. Three years later he launched the National Television Network which eventually became the Nine Network. Packer's eldest son, Clyde, was trained up in the television trade but when they fell out and when Packer died in 1974, his other son, Kerry, bought out his brother for a reported $4 million. And then James inherited the lot.
Much of Packer's television was a pale imitation of stuff tried and tested overseas. In television nobody loses money by innovating. Even the ''We're the One'' theme was purloined from the ABC or the Yanks, depending on who is telling the story. The early years were money for old rope and American-made series could be bought for a song while Australian content rules were risibly flaunted.
Perhaps the greatest and most enduring Packer contribution to the television industry was the discovery of how to make money out of nothing: Television is a sales medium best epitomised by Graham Kennedy's shows of the late '50s and '60s. Incredibly they were little more than a 90-minute advertisement occasionally interrupted by a singer or two, a ballet, a few sketches and a barrel segment. Nobody ever made money so easily.
Maybe CVC should dig out some old clips from the library.
Nothing like a fine repeat
THE Nine Network woes have little to do with what it is putting on television, and everything to do with the Packer family's last exit from the media business in 2007, which put Nine into the hands of private equity and up to its neck in debt.
Of course, it was a Packer repeat.
''You only ever get one Alan Bond in your life and I've had mine,'' the late Kerry Packer famously said of the West Australian who shelled out $1.2 billion for the Nine Network in 1987 and subsequently lost the lot. Packer senior got the network back for a song.
Twenty years later his son James found his own bondsman, private equity investor CVC Asia Pacific.
It effectively paid more than $5 billion for the network and its magazine division ACP, and now cannot repay the debt.
CVC paid Packer's Publishing & Broadcasting Ltd (PBL) $1.46 billion in cash for a 75 per cent stake in the media assets and also took on $3.6 billion worth of debt from PBL. A year later, the high debt and flimsy equity component meant the business was worthless.
Nine has effectively been on death watch ever since, the financial crisis making it virtually impossible to refinance the debt, and emboldened lenders looking to take control of the business instead.
Talks are continuing but should they fail Nine will collapse under debt it cannot refinance or repay.
The prospect of transferring ownership to its lenders, in return for the cancellation of their debt, could represent salvation for Nine.
For CVC there is no deal that will mitigate the disaster that has been its foray into Nine.
It has now lost all of the $2 billion it injected into the Nine group.
