Don Groves is a Deadline contributor based in Sydney

The hedge fund which bought Australia’s Nine Network and magazine group from James Packer for $A5.5 billion in 2007 and has since struggled to pay down the debt may have find a lifeline- although it may be forced to take a sizable haircut.  Hollywood mogul Harry Sloan is teaming with private equity group TPG to launch a $3 billion bid for Nine Entertainment Co., according to The Australian Financial Review. Nine’s owner, CVC Asia Pacific, is under pressure to do a deal as it is obliged to repay $2.8 billion in senior debt in February 2013. It also owes about $1 billion to mezzanine or second-tier lenders led by a Europe-based Goldman Sachs fund. The paper said TPG managing partner Ben Gray met with Nine chief executive David Gyngell and other senior management in Sydney this week.  Nine comprises  east coast free-to-air TV stations, ACP Magazines, the Ticketek agency, the Allphones Arena in Sydney  and a 50 per cent share in NineMSN. In May the Fin Review reported Sloan had met with CVC Australia boss Adrian McKenzie to discuss a proposal whereby Sloan’s  Global Eagle Acquisition Corp.  would raise the capital to pay back Nine’s senior lenders and take a controlling stake in a refinanced Nine listed on the Nasdaq. Nine’s ratings have improved due largely to Australian series The Voice and The Block and it has the free-to-air rights to the London Olympics.  But analysts expect its earnings to be flat at best this financial year, with the free-to-air television advertising market tipped to grow by  just 1%. Nine has a 33.5% share of the TV ad market, vs. Seven with 40.7%  and Ten at 25.8%. One media analyst told Deadline that he believes CVC Asia Pacific  is in “loss-mitigation mode, looking for a face-saving exit.” He sees a daunting challenge facing any potential new owners, observing, “They’ll get (Nine) on the cheap and look to rebuild, but do they have the firepower to do it, particularly as both major competitors (Seven and Ten) have recapitalized? It looks like a game of pass-the-parcel between private equity groups.”