916 Entertainment reports that the share price of the Australian broadcaster has been hammered to a six-month low, as investors look for a return on their money.
The ABC is one of the few broadcast media companies in the country to survive the crisis.
In an interview with The Wall Street Journal on Tuesday, ABC CEO David Gyngell said he had no choice but to put the ABC in a ‘state of extreme jeopardy’ following the global financial crisis.
“If you want to survive this financial crisis, you have to be really, really, incredibly tough, and I’m not really sure that I have that right at this stage,” Mr Gyngee said.
“The reality is, you can’t do that and the reality is we have no choice.”
The ABC’s parent company, News Corp, has been hit by the global economic downturn and is struggling to stay afloat.
It has said it needs to raise more than $US150 million to keep its ABC News program running.
News Corp’s chief executive Andrew Halsey said in January that the company was prepared to put up to $US1 billion ($1.1 billion) in capital to ensure the ABC survives.
“We’re absolutely in the red, but we’re going to do what we have to do,” Mr Halseys said.
He said he was confident the ABC could survive without the assistance of external investors, but that he expected it would need $US300 million to do so.
ABC chief financial officer David Gwyngell says the company is ‘in the red’ but it needs a significant injection of cash.
Photo: Reuters Mr Gwyngles comments came amid reports that News Corp has asked the Australian Securities and Investments Commission (ASIC) to examine the ABC’s financial position, which is in a “state of absolute jeopardy”.
The ABC has said in recent months it had been trying to find the right way to continue.
ABC managing director of corporate affairs Paul Kelly said in a statement on Tuesday that the ABC was facing a “complex and challenging” situation.
“Our board has been discussing with regulators the potential for our business to be adversely affected if it is not able to access capital,” Mr Kelly said.
”While we are in a state of extreme peril, we are determined to make our financial situation as secure as possible for the future.
“Mr Kelly told the ABC that the board was confident that it would continue to operate as it had before the financial crisis and that the outlook was “very positive”.
ABC CEO Andrew Halkett says the ABC is ‘at risk’ but he’s confident it will survive without external help.
Photo/ABC “We’ve had a pretty good run, and we’ve seen that it’s been a great investment, and it’s going to be a great continuation of that,” Mr Healy said.
The Financial Review understands that News Corporation is seeking to raise up to US$US300m in capital in an investment package. “
It’s a big and very, very, complex situation, and that’s why it’s very, really important that we find the proper resources, the appropriate capital, to keep the ABC going and run the business as it has been.”
The Financial Review understands that News Corporation is seeking to raise up to US$US300m in capital in an investment package.
“As the global economy gets worse and worse, the more and more you need to get out of debt, the harder it becomes to get funding,” Mr Scott said.
In February, News Corporation and ABC CEO James Murdoch signed a deal to merge.
It is the biggest merger in Australian media history.
“Today is a great day for ABC shareholders and for ABC staff and I am confident that ABC shareholders will be able to see the ABC continue to thrive and grow,” Mr Murdoch said in the announcement.
“With our combined resources, we will ensure ABC News continues to deliver high quality, innovative content and audiences in the Australian way.”
The announcement of the deal came after the ABC reported that its Australian audience had fallen by 7.7 per cent since the financial downturn.