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Nine saved from administrators: report


The Nine Network has reportedly staved off administration, with lenders agreeing on a debt-for-equity deal where two US hedge funds and investment bank Goldman Sachs will take a stake in the broadcaster.

Nine has not confirmed the deal but the Australian Financial Review reported on Tuesday afternoon that the lenders had reached an agreement on the $3.3 billion debt that threatened to cripple the network when repayments fell due in early 2013.

Negotiations are still expected to continue on Wednesday.

Earlier on Tuesday, Nine chief executive David Gyngell told reporters he was "quietly optimistic" about the network's future as he left a crucial meeting in Sydney between Nine's lenders: hedge funds Apollo and Oaktree, and investment bank Goldman Sachs.

If Nine is unable to secure an agreement among its lenders the network faces being placed in administration because it would be unable to service its debt.

As Nine's lenders continued negotiations on Tuesday, the National Rugby League (NRL) said its $1 billion broadcast rights contract, signed with the network and pay TV provider Fox Sports in August, was not affected by the debt crisis.

"The issues that Nine needed to address in terms of its funding were something that were discussed during the negotiation process," NRL media and communications director John Brady said.

"It's not unexpected that they have to go through this issue."

Fusion Media analyst Steve Allen said that to date the Nine Network had not suffered any brand damage, however being placed in administration might force it into damaging advertising rate cuts to resecure advertisers.

"So far Nine has been quite happy to trade at very similar numbers to (rival network) Seven, based on its performance," Mr Allen said.

Mr Allen said discounting would force Nine into a battle with third-ranked commercial network Ten while Seven grabbed market share.

"That would make it more difficult to turn Nine around," he said.