Network Ten must completely transform itself, possibly into a right wing news channel like Fox, says a former investor in the struggling free-to-air broadcaster.

Pioneering funds manager Laurence Freedman, who made a fortune after steering Ten out of receivership in the 1990s then selling his holding in the mid 2000s, said the network as few options left to return to profitability.

His comments come after the broadcaster posted a $168 million full-year loss and  Fairfax Media, owner of The Age, The Sydney Morning Herald and The Australian Financial Review, confirmed it had met Ten executives about a possible merger.

But Mr Freedman said a partnership with Fairfax would not solve Ten's woes.

"It's the decrepit talking to the destitute," he said.

Such a merger would hinge on Fairfax selling its profitable radio stations so it didn't breach media ownership laws. Mr Freedman said these laws, which prevent a media company owning a newspaper, television network and radio station in the one market, were outdated and irrelevant.

"New technology a long time ago has made a nonsense for the reason for those laws.

"Every person on the planet is a journalist or an opinion maker or taker and there are no boundaries. To have artificial boundaries makes no sense and also is making life more difficult for media businesses that are caught like Ten and Fairfax.

"For Fairfax to sell [its radio stations] in order to buy a semi defunct, old technology company, without a direction or audience, doesn't gel with me."

A Fairfax Media spokesman confirmed the company's management met with Ten recently, but said it didn't mean it would lob a takeover offer.

"We wouldn't be doing our job if we didn't talk extensively across the industry so we fully understand the opportunities and challenges," the spokesman said.

Ten has stressed that it is undergoing a multi-year turnaround, focusing on event and reality television, sports rights and winning back media buyers through the success of shows like Family Feud and The Bachelor.

Mr Freedman helped deliver Ten riches in the 1990s by focusing the network almost exclusively on targeting the 16 to 39 year old age group.

But he sold out of the company in 2004 after he bought his third phone in a year and found that it had internet connectivity.

"That was a very big warning bell for me that the medium was changing, there was newer technology and therefore I was very cautious.

"If the audience migrated were going to have a huge problem because who were we going to advertise to. We had the biggest budget of people like Levis, Just Jeans, Coke, Pepsi and all those sorts of things and very little of David Jones because of our audience."

People called Mr Freedman mad for selling his stock but his fears were eventually realised.

He said Ten was unlikely win back its audience, which has permanently shifted to online platforms or to rival networks, even if it delivered the best television programs at attractive timeslots.

"The way you advertise television is not by putting ads in the newspaper, you put it on your own network. You can't put it on anybody else's network.

"But If you put it on your own network and there is nobody watching your own network, then you don't get the viewers going to the new program. It's a very vicious cycle. How you get out of it? You have to transform yourself."

Mr Freedman said a free-to-air television licence was still valuable and suggested the network becoming a "hard right wing news channel, a la Fox" could solve its problems.

But he said there were a lot of hurdles to achieving that goal. Indeed, Australian Competition and Consumer Commission chairman Rod Sims said he would have difficulty approving a Foxtel/Ten merger.

"We would have concerns if Foxtel sought to own a free-to-air station because that could substantially lessen competition in the viewing market," Mr Sims said.

And Mr Freedman conceded that News Corp, which owns jointly owns Foxtel with Telstra, would face the same problem as Fairfax because its non-executive co-chairman Lachlan Murdoch owns the Nova Entertainment radio network.

"There are lot of things in its way but my point really is that to turn around is not about trying different programs or different timeslots for the programs it's got. It needs to be revolutionary, not evolutionary."

"The management [at Ten] is OK. But they can't do anything with it.

"It's like you've got a very good old car but it hasn't got a synchromesh gearbox, it has got narrow tyres, it's got a top speed of 70 kilometres an hour, and its competing with everyone who has got hybrids, and cars that can go 0-100 kmh in three seconds etc, etc… that's what the problem is."

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