It’s all Sky’s fault!

June 17th, 2013 at 5:11 pm by David Farrar

released:

The Government’s refusal to break the stranglehold of pay-TV company Sky on the media market has contributed to the position finds itself in today, says Labour’s Broadcasting spokesperson Clare Curran.

This is bizarre. Clare seems to have a fetish against . It seems they are responsible for everything bad in broadcasting (despite keeping Backbenches on the air) and somehow are magically responsible for Mediaworks taking on too much debt.

TVNZ has remained profitable, so blaming the receivership of Mediaworks on Sky TV is ridiculous, and scapegoating. In fact their problems are long-standing around their level of debt.

“Instead of throwing a $43 million loan at MediaWorks three years ago to bail them out of a short term sticky situation, the Government should have done what most other countries do and free up the market to enable free to air television to compete with pay-television.

I’ve never heard of a loan with commercial interest rates (now repaid) being referred to as throwing money away before.

And by “free up the market”, I presume the actual intent is to regulate against Sky for being too successful!

I notice Clare’s press release is not on the Labour website. Does her statement speak on behalf of the Labour Party? Do they also believe that Sky TV is responsible for Mediaworks having too much debt?

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44 Responses to “It’s all Sky’s fault!”

  1. KiwiGreg (3,129 comments) says:

    So the guys who give the stuff away cant compete with the guys who charge for it?

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  2. DylanReeve (179 comments) says:

    There are plenty of reasons to take issue with the near-monopoly position that Sky has been able to establish, but this isn’t really one of them as far as I can tell.

    MediaWorks has been reasonably profitable, but they’ve also been heaped with massive debt since the IronBridge buyout in 2007. The issue with MediaWorks is simply that they’ve been unable to properly service their debt, not that they’ve had problems securing content or operating in a successful commercial way.

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  3. burt (7,091 comments) says:

    And by “free up the market”, I presume the actual intent is to regulate against Sky for being too successful!

    I doubt that is the plan – more like nationalise it. I mean really… The gummit should own and operate all communications with the sheeple…. I works for other socialist states to make sure the people know how wonderful dear leader really is…

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  4. Adolf Fiinkensein (2,681 comments) says:

    DylanReeve

    You need to learn something about business.

    Businesses which are unable to properly service their debt are NOT operating in a successful commercial way.

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  5. kowtow (6,717 comments) says:

    As Armstrong said the other day, Labour has become the dog that barks at every passing car.

    Wof wof.

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  6. Jack5 (4,224 comments) says:

    Sky’s not to blame.

    However, I’m not sure DPF is right about TVNZ being profitable. I think TVNZ is profitable only by including Government subsidies in its income.

    TVNZ doesn’t make it easy to get a hand on its annual report. The search function on the TVNZ web site doesn’t bring up the annual report, and the report doesn’t seem to be on Parliament’s site, but someone following Kiwiblog might be able to say where it’s available, and whether it groups subsidies and grants with other income.

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  7. RF (1,132 comments) says:

    A typical response from a failed member of the snafu party.

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  8. Keeping Stock (9,791 comments) says:

    Personally, I reckon that Curran has got confused between Sky TV and SkyCity. That’s a perfectly understandable mistake for her to have made, given the amount of publicity the evil casino operators have had over the last week for dragging Labour MP’s kicking and screaming into their corporate box to brainwash them :D

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  9. tvb (3,945 comments) says:

    It Curran wants to blame anyone it is TVNZ but then that does not fit her narrative. TvnZ = government owned = good. Sky = private= bad. Believe it that woman is as superficial as that.

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  10. queenstfarmer (696 comments) says:

    It will come as no surprise that Clare Curran has no idea what she is talking about.

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  11. DylanReeve (179 comments) says:

    Businesses which are unable to properly service their debt are NOT operating in a successful commercial way.

    The point being that MediaWorks wasn’t suffering from a lack of content as Curran’s release suggests. It’s issues were entirely financial and really nothing to do with it’s access to content.

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  12. DylanReeve (179 comments) says:

    However, I’m not sure DPF is right about TVNZ being profitable. I think TVNZ is profitable only by including Government subsidies in its income.

    TVNZ is profitable and has remained that way all through the financial crisis. The government made it very clear to TVNZ’s board that operating at a loss was not acceptable.

    TVNZ’s after-tax profit in 2012 was $14m, $11.3m of which was paid as a dividend to the government. [Source]

    Also, TVNZ receives no subsidies beyond those available as contestable funding through funding bodies such as NZ On Air. TVNZ costs the taxpayer nothing and has consistently generated a profit for the government.

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  13. s.russell (1,486 comments) says:

    Something bad happens. It is the Govternment’s fault. What’s more logical than that?

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  14. Johnboy (13,424 comments) says:

    If TV3 get rid of that funny looking little leftie prick, with his eyes too close together, their financial situation should soon improve! :)

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  15. wreck1080 (3,527 comments) says:

    I hope the taxpayer doesn’t bail them out.

    Otherwise, it makes the government look 2 faced.

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  16. DylanReeve (179 comments) says:

    I hope the taxpayer doesn’t bail them out.

    Seem unlikely. A private group was already in negotiations to buy MediaWorks, but that’s not be finalised in time.

    If I understood more about corporate finance I might find it suspicious that the company went into receivership during that process because I’d assume it would allow MediaWorks to shed some debt with procedure and then allow the new group to buy MediaWorks cheaper and have it less debt-ridden too. But I don’t so I could be talking out my ass on that one.

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  17. niggly (779 comments) says:

    It’s a worry for Labour when Labour’s communication expert, Claire Curren, has little understanding of why MediaWorks is in financial trouble and instead resorts to issuing a badly thought out press release blaming the Govt.

    It’s also a worry for Labour when we think back and remember that Sky (went it was setup during the time of the Lange Govt) was originally part owned by TVNZ (and other NZ companies).

    It’s also a worry for Labour when we think back to the Clark Govt and remember not only did Labour force TVNZ to sell-off their share in Sky TV, but they also blocked then TVNZ’s plan to take Sky TV on at its own game using new technologies such as satelite and broadband delivery – all the things which Claire Curren is harping on about in her press release and it would have given TVNZ invaluable experience operating in a converged media environment.

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  18. Tom Jackson (2,261 comments) says:

    Sky sux. I’ve had pay tv on three continents and sky is the crappiest and most expensive by far. It’s a disgrace.

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  19. Johnboy (13,424 comments) says:

    It’s all right for you to say that TJ. Try telling my wife that “The Living Channel” is shit! :)

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  20. dishy (199 comments) says:

    Curran’s comment is even more stupid than the comment made by some moron on Stuff the other day, when they said that some people use the Christchurch City Council as an escaped goat.

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  21. Johnboy (13,424 comments) says:

    That sounds like the sort of proposition I could be interested in dishy….Tell me more! :)

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  22. Pauleastbay (5,030 comments) says:

    Tom Jackson

    Examples please with prices and content

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  23. dishy (199 comments) says:

    So according to Clare “Chicken Little” Curran, the sky is falling because Sky TV isn’t. She should stick to what she knows about. Which is…..um…..errr….

    Sky TV is profitable because it’s so popular that even people who claim to be poor have it. So it must be wicked and evil for depriving kids of breakfast.

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  24. Pauleastbay (5,030 comments) says:

    Labour will be severely worried if ( and its not going to happen) if TV3 went tits up. No more propaganda

    The 3 news is simply appalling and even more biased than TV1

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  25. Reid (15,592 comments) says:

    It’s a worry for Labour when Labour’s communication expert, Claire Curren, has little understanding of why MediaWorks is in financial trouble and instead resorts to issuing a badly thought out press release blaming the Govt.

    Well it would be if they were a proper opposition in waiting but they’re a bunch of self-seeking incompetent venal morons who don’t care about anything except getting themselves re-elected and think they’re on a direct automatic track toward that so therefore they feel free to say any old thing and release it in the certain knowledge that the completely useless MSM will never critique it in any way.

    And so far, their “clever” “plan” seems to be working just fine. Why what’s the bet both channels cover it tonight and they report it as if every stupid little allegation in it is a self-evident fact.

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  26. Johnboy (13,424 comments) says:

    Time we sold TV1 to the highest bidder before the lefties assume power again.

    What the fuck does a government need a TV station for anyway?

    Sorry I forgot. :)

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  27. dishy (199 comments) says:

    Pauleastbay, I agree. I used to watch TV3 news, but I gave up. The last straw was the main newsreaders’ habit of describing a certain event as “embarrassing” for National, Dunne etc. Fuck off TV3. Just tell us what happened – according to you. We’ll form our own opinion, thank you very much. If I want opinion pieces, I’ll ask a fat white taxi driver.

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  28. Steve (North Shore) (4,327 comments) says:

    Sky TV is to blame? Fuck off Curran. I have and pay for Sky TV because I can not stand the shit that is on TV3 or any of the other Mediaworks crap.
    Labour is losing another free propaganda outlet paid for by the ever paying TAXPAYER. Labour will get re-elected on Policy, not Socialist controlled bullshit. Back to OZ Claire and take Wussel with you

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  29. Manolo (12,637 comments) says:

    DPF, please stop giving oxygen to this despicable socialist. She deserves starvation.

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  30. scrubone (2,971 comments) says:

    The last couple of times I’ve seen her in public she looks really shaky, none of the confidence of the past. Has something happened to her?

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  31. RF (1,132 comments) says:

    I heard that she was seen polishing her desk top with the lame duck. He was squawking and quaking away to his hearts content and told to keep the noise down.

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  32. Eisenhower (134 comments) says:

    “Examples please with prices and content”

    Try Direct TV in the US – $35 (NZ$44) a month for over 200 channels, most in HD and no DVR rental cost. What has Sky got? 50 odd, with just five or six in Hi-Def, plus MySky rental for around $120?

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  33. niggly (779 comments) says:

    Crikey RF, good thing I had finished my tea when I read your comment otherwise it would have been spattered all over the monitor amongst fits of laughter! The mind boggles at the very thought … hope whoever saw that has manged to seek some councilling?

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  34. dime (8,778 comments) says:

    shes batshit crazy.

    in her defense though, tv3 goes back even further than the highlanders jersey! its our heritage!?

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  35. Jack5 (4,224 comments) says:

    Dylan Reeve posted at 5.58:

    … TVNZ costs the taxpayer nothing and has consistently generated a profit for the government…

    It would still be helpful if we taxpayer plebs could readily check the annual report on the web, particularly looking for any details of money from the Government in the income statement and the cash flow statement or in the notes to these.

    Do you know where is it available on the web please, Dylan Reeve?

    Unlike the many privately owned companies that are “issuers” (have shares or issue debt), and unlike building societies, etc, and overseas controlled companies, TVNZ doesn’t post its annual report with financial statements on the Companies Office site. There doesn’t seem to be any on TVNZ’s own web site. Even charities post financial summaries on the web. State owned enterprises ought to, as well, though for most their annual reports with financial statements are easy to locate.

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  36. Jack5 (4,224 comments) says:

    Further re Dylan Reeve’s 5.58:

    The “source” he points to in that post, is a TVNZ summary – that is interpretation – of its own result, not the audited annual report with financial statements.

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  37. infused (616 comments) says:

    @Eisenhower Sky can charge that much because there is no alternative. Welcome to capitalism.

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  38. Akld Commercial Lawyer (138 comments) says:

    SOE, etc, annual reports can be obtained via the Crown Ownership Monitoring Unit (previously CCMAU) see http://www.comu.govt.nz.

    And the “hive down” is not all that suspicious – in that the appointment of the receivers gives a method of controlling the business for the senior creditors. From there, they sell the rump of the business into a new vehicle that will be less burdened by debt. However, typically a deal will have to be done with other secured creditors – so some of the junior creditors take a haircut but get to walk away, whereas the senior creditors will be continuing to wear the risk of carrying the business in the expectation that a lesser amount of gearing will buy some breathing room to restructure and get into the black.

    About the only avenue left as NZ regime is less flexible than others, espec US in facilitating otherwise sound businesses that are struggling under a debt mountain. The underlying policy of the US regime is to get productive businesses operating as quickly as possible so that all stakeholders (incl employees) can have as much continuity as possible.

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  39. flipper (3,273 comments) says:

    Say Dwight D E …
    Care to re-examiner those figures you quote?
    MySky is a matter of YOUR choice … not a standard $1320.

    As for the # of channels…..we have few foreign language (including Polynesian and Chinese) than some US cable providers.
    Moreover, apart from an idiotic Prime News element, Sky does not have MSNBC crap.

    Curran is clearly still living in the world of NZBS/ABC/BBC and their “we know best”: philosophy.

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  40. Mobile Michael (367 comments) says:

    What do expect from the woman who blamed the Greens for Labours low voter numbers. Its always someone else…

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  41. Simon (613 comments) says:

    “And the “hive down” is not all that suspicious”

    Crap. That depends on the shareholding of the new ownership entity and off balance sheet arrangements with the secured creditors. The unsecured creditors take a hit at the expense of the shareholders. Trust that the IRD appoint liquidators to review the whole fuck up.

    The proper course is receivers sell the assets of the failed business in the open market.

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  42. DylanReeve (179 comments) says:

    It would still be helpful if we taxpayer plebs could readily check the annual report on the web, particularly looking for any details of money from the Government in the income statement and the cash flow statement or in the notes to these.

    Do you know where is it available on the web please, Dylan Reeve?

    Google is your friend…

    TVNZ Annual Report FY2012 (PDF) – first result in a search for “TVNZ Annual Report 2012″ – the summarised details in the press release seemed easier to link to yesterday.

    It received $30.8m funding in 2012 from government entities (NZOA and Te Mangai Paho I imagine) and also spent $21.3m with government entities (mostly Kordia I expect)

    Once again – TVNZ is not directly funded by the government/taxpayer, it actually generates a profit for the country.

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  43. Jack5 (4,224 comments) says:

    Dylan Reeve, thank you for the TVNZ annual report. It would be helpful if it was on the Companies Office site, too, with all the others. I don’t agree with your conclusion, however.

    From a quick look:

    Inward cash flow includes $25,667,000 in government grants.

    In the income statement, revenue includes $30,819,000 of Government funding. This compares with an after-tax profit of $14,207,000.

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  44. Jack5 (4,224 comments) says:

    TVNZ’s on a June 30 year, and last year (the 2012 financial year, whose report we are talking about),
    it paid the Government a dividend of $11.3 million.

    In the 2012 financial statements, the notes explain that it runs an account from which Government funds are released into the revenue account.

    Regardless, the cash flow statement shows Government funds flowing in exceed those flowing from TVNZ to the Government.

    It’s as though shareholders pumped $31 million into the company they owned, which then recorded this as revenue. It then reported a profit of $11 million, and people trumpeted that the company was profitable!

    C’mon!

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