Bruce Gordon's WIN Corp, the regional TV broadcaster that reaches 25 per cent of Australian viewers, is in last-ditch talks with Nine Entertainment to stop its services from "going to black" at midnight tonight.
WIN is one of regional Australia's biggest broadcasters and gets the vast majority of its content, including popular live cricket matches, from Nine in exchange for 39 per cent of its advertising revenue.
But Nine has argued that it bears too much of the risk and demanded a larger 49 per cent share of WIN's ad revenues as part of a new licensing deal, warning that it will cut off its broadcast feeds at 12.01am on New Year's Day if a deal is not done by then.
It is understood WIN was refusing to budge during high-level talks on Wednesday afternoon.
Failure to strike a deal would leave regional viewers with the limited range of programming that WIN itself controls. Rural and regional fans of the cricket would have to switch over to SBS for the upcoming Tests between Australia and the West Indies as well as India.
Sources close to both parties revealed to Fairfax Media that merger talks are also on the table, which would see the creation of a broadcaster worth up to $1.8 billion.
"The negotiations are ongoing and Nine are hopeful WIN will come to the table with something meaningful so we can move forward," a Nine spokeswoman said.
Nine has held previously exploratory talks to supply its broadcast feed to rival rural broadcaster Southern Cross, which currently uses Network Ten's less popular content in a deal that expires in June 2016.
WIN would be expected to keep a stake in a combined entity, but discussions remain at an early stage with no firm discussions around price or structure. WIN's value has been speculated at between $150 million and $300 million. Nine's market capitalisation is $1.6 billion.
WIN's Bermuda-based billionaire owner Mr Gordon already owns a 14.95 per cent of both Nine and Network Ten.
But both parties are limited by the Reach Rule, which prevents any one party from owning metropolitan and regional broadcasters. Prime Minister Malcolm Turnbull is expected to push for a scrapping of the law next year.
