MediaWorks and the mysterious $17m Christmas miracle

Chief executive Mark Weldon would have gone to sleep happy on Christmas Eve knowing the $17 million share certificates were stuffed into his owners' stocking.

The night before Christmas, when all through Companies House, not much was stirring except for the curious issue of 17,084,000 MediaWorks shares to its enigmatic owner, Oaktree Capital.

The broadcaster had a horror 2015, attracting public protests by axing John Campbell and losing viewers from its suite of flagship reality shows as many decided the magic had gone from many of its tent-pole reality franchises.

Chief executive Mark Weldon would have gone to sleep happy on Christmas Eve knowing the 17 million share certificates were stuffed into his owners' stocking. But, given neither the company nor Oaktree was willing to talk about this silly-season capital restructuring, figuring out what had happened would require a Christmas miracle.

The miracle, as it turns out, is the high capacity for boredom and vague bent towards pattern recognition of your humble narrator.

After I spent a morning digging through MediaWorks' accounts, a curious figure emerged.

The company began its 2015 financial year owing $90 million to its banker.

While what is now owed to Westpac represents a steep decline from the nearly $800 million owed to a syndicate of anguished bankers that precipitated its 2013 receivership and subsequent takeover by vulture fund Oaktree, current arrangements are due to last only five years and are said in financial statements to require regular repayments.

Oddly enough, the amount due to be paid to Westpac by MediaWorks during the 2015 financial year, the date of which was extended thrice over the past 12 months and just ended on December 31, was $17,084,000. Weldon would have slept easy on December 24 in the knowledge that Oaktree had stepped in to cover his looming multimillion-dollar loan repayments.

Oaktree looks to have - and the odds of the share issue and due debt just coincidentally being the same are 100,000 to 1 - injected just enough capital at the end of the year to cover the annual payments to the company's bankers.

It's an open question whether Weldon could have scrimped and saved that $17 million last year, despite the mid-year decision to impose double-sided printing to make more efficient use of the paper budget. That figure would have eaten up almost all of the $25 million in earnings reported for the 2014 financial year, and the company's financial performance (due to a softening broadcast advertising market and lower ratings on TV3) is understood to have slid since then.

Oaktree, whose motives are likely to remain mysterious given its lack of response to interview requests, is now in a holding pattern. It informally shopped the business to the market early last year and was unsatisfied with what was offered, so the $17 million injection represents a doubling down on its investment.

The move also gives Weldon and his company some breathing room to start 2016. All will be keen to have a happier New Year.