• SCA to sell its television licences in Queensland, southern NSW and Victoria to Network 10
• SCA to receive a share of the profit from the 3-Agg Market licences for 5 years after completion
• Integration of the 3 Agg-Market licences under Network 10's ownership to deliver improved and more sustainable earnings

Southern Cross Media Group Limited (SXL) has announced that it has signed heads of agreement for the sale of its television licences in the three aggregated markets of Queensland, southern New South Wales and Victoria (3-Agg Markets) to Network 10. SCA currently broadcasts Network 10 programs under regional affiliation arrangements in these markets. Completion of the sale is subject to execution of final transaction documentation and satisfaction of customary conditions. The terms of the sale provide that SCA will be entitled to receive a share of the profit of the 3-Agg Market licences for five years after completion of the sale (Participation Period). Integration of the 3 Agg-Market licences under Network 10's ownership and control will deliver an improved and more sustainable earnings outcome compared to SCA's current earnings profile under its regional affiliation arrangements with Network 10. The consideration to be received by SCA will be dependent on advertising market conditions over the Participation Period and is expected to be in the range of $15 million to $20 million in aggregate gross consideration, with a net present value of $10 million to $15 million on completion of the sale. SCA will also be entitled to a share of any 'digital dividend' received by Network 10 if Network 10 surrenders its spectrum in the 3-Agg Markets to the Government during the Participation Period. SCA will retain its local salesforce in the 3-Agg Markets and will provide third party local advertising sales representation services in the 3-Agg Markets for Network 10 during the Participation Period.

Based on current and forecast advertising market conditions, SCA currently expects the aggregate gross consideration to be received by SCA over the Participation Period to be in the range of $15 million to $20 million. The net present value of this gross consideration on completion of the sale is expected to be in the range of $10 million to $15 million.