The insolvent pay TV group Australis Media was forced to switch off its
70,000 Galaxy subscribers last night after its receivers blamed regulatory
constraints for their failure to meet yesterday's deadline to sell the company's
The company's receivers, Ferrier Hodgson, said in a brief statement yesterday
that "the regulations structure" prevented them from concluding talks -
believed to be mainly with Optus - to sell Australis's 70,000 Galaxy-subscriber
base and other assets.
The Australian Competition and Consumer Commission is understood to have
vetoed the sale of any of Australis's assets to Foxtel, while Austar yesterday
said it was not interested in buying Australis's subscriber base, leaving Optus
as the only significant industry bidder.
The receivers said last night they had "failed to come to a satisfactory
conclusion" about the sale of Australis's key operating segments because of
regulatory constraints, but did not give a detailed explanation.
Australia's first pay TV company, Australis Media was ordered to appoint
liquidators on Monday by the Supreme Court. The receivers, Mr Peter Walker and
Mr Steve Sherman from Ferrier Hodgson, took over management of the company
several weeks earlier but have so far been unable to reconstruct Australis as a
viable business or offload the company's remaining assets.
Since then, the receivers have continued attempts to offload some assets,
including the Galaxy subscribers, to raise money to pay out the group's
creditors, but have so far failed to come to an agreement.
Optus is believed to have bid for the subscribers, but unspecified
"regulatory issues" appear to be blocking progress.
Australis's creditors are owed close to $1 billion, but only a few are
expected to recover any money.
After talks stalled yesterday evening, the receivers gave notice they
intended to switch off the Galaxy signal, which was expected to leave
subscribers with a blank screen and force Foxtel and Austar to make alternative
"The receivers have given notice to Austar, East Coast TV, Optus and Foxtel
that as from midnight (last night), Australis will no longer be in a position to
transmit signals to Galaxy subscribers," they said.
But confusion mounted after Galaxy subscribers told The Age last night they
had started receiving Austar's signal. Austar was unavailable for comment and
the receivers said they believed all subscribers would be switched off at
However, Austar's 200,000 subscribers will be switched to an emergency
programming supply while the company arranges a permanent supply. Austar, which
transmits satellite pay TV to regional customers in most Australian states, is
believed to be in discussions with both Optus and Foxtel.
Meanwhile, Foxtel also has an alternative agreement with the Hollywood
studios from which it was receiving programming, via Australis, under a $4.5
billion 25-year deal. The new deal cuts the cost of supply to Foxtel by more
than $4 a subscriber and is believed to allow it to take programming directly
from the United States, once it stopped receiving Australis's signal last night,
without a break in transmission.
Elsewhere in the pay TV industry, sources said Mr Kerry Packer's arrangement
to "equalise" the stake of his listed company Publishing & Broadcasting with
Foxtel meant it had an option to buy one-third of Foxtel, with joint owners
Telstra and News Corp selling down equally.