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austar in red but looks rosier

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    Regional pay-television operator Austar will reveal today a substantial turnaround in its operations during the three months to March 31 after last year's much-vaunted restructuring and the renegotiation of its financial position with its bankers.

    It is understood Austar went close to being cash-flow positive during the quarter, recording a slight loss at the EBITDA (earnings before interest, tax, depreciation and amortisation) line after shaving as much as $17 million from costs and securing margin improvements of at least $3 million from lower programming costs.

    The group remained in the red after booking a small loss for its TVSN joint venture, but the result is a substantial improvement on the $20 million EBITDA loss recorded during the final quarter of 2001.

    News of the improved result comes as Austar seeks closer ties with Australia's dominant pay-TV company, Foxtel.

    There is speculation that the two groups will merge, particularly if Foxtel's proposed programming alliance with Optus is not approved by the Australian Competition and Consumer Commission.

    On Friday, representatives of the pay-TV industry group ASTRA met the ACCC on an informal basis to provide the regulator with more detailed information about the structure of pay-TV programming as Foxtel and Optus work to convince the regulator that their alliance does not harm competition.

    Meanwhile, Foxtel chief executive Kim Williams returned from Los Angeles yesterday after meetings with the Hollywood movie studios.

    The Premium Movie Partnership's new chief executive, Jack Matthews, was present at the briefings by tele-conference.

    Sources said Mr Williams provided a "very good presentation" to studio executives, and that the studios would now discuss Foxtel's proposals.

    Speculation has centred on the studios contemplating at least a 20 per cent cut in their rates in return for a new long-term deal to supply Foxtel with movies. ...........gosh..........

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