SALE OF TELSTRACLEAR SATELLITES

Summary

Advised TelstraClear on the sale of a transponder on the Optus D1 satellite to Television New Zealand, the state owned broadcaster. The transponder had a transmission footprint covering New Zealand.

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Background to the Role

TelstraClear was New Zealand's second-largest telecommunications company before being acquired by Vodafone in 2012. As part of its overarching strategic direction, TelstraClear had taken a long-term commitment over two satellites that had specific broadcast capability spanning just New Zealand. However, these access rights were not being utilised and were an expensive operating cost to TelstraClear.

In order to reduce the financial burden of the satellites, TelstraClear had gone to the New Zealand market but was unsuccessful in selling down the broadcasting rights.

The Business Need

Telstraclear engaged Cranleigh to undertake a second attempt to sell down the broadcasting rights. Cranleigh identified that there were only two potential purchasers – Sky

TV and Television New Zealand. The issue for Cranleigh was how to get previously unwilling buyers to bid for the broadcasting rights.

The Cranleigh Solution

The Cranleigh approach was two-fold:

1. Cranleigh determined that Sky TV earned a significant portion of its revenue from providing broadcasting facilities to independent organisations who liked to have their own channel (e.g., Shine TV and the Arts Channel). Cranleigh also determined that TelstraClear had broadcast upload facilities in Wellington which were unutilised but could be made available. Consequently, Cranleigh approached these entities and offered a competing service. This subsequently caused much consternation at Sky TV due to the potential revenue degradation.

2. In respect to Television New Zealand, Cranleigh determined that New Zealand was the only OECD country that did not have free satellite broadcasting facilities. Cranleigh subsequently prepared, and had published in major newspapers, an article highlighting this significant deficit in New Zealand's broadcasting network. The intended audience was the Television New Zealand Board and CEO, as well as the Minister of Broadcasting.

Following these two steps, Cranleigh found that there were two potentially interested parties: Sky TV and Television New Zealand (TVNZ). This novel approach assisted TelstraClear in bringing two (otherwise unwilling) parties back into the sale process. Telstraclear was subsequently successful in selling the rights to TVNZ.