Radio NZ well off compared to the ABC

May 20th, 2014 at 4:00 pm by David Farrar

The Coalition for Better Broadcasting (aka the Coalition for higher taxation) has said:

The Coalition for Better Broadcasting is disappointed at the lack of recognition for Radio NZ in the 2014 Budget. In fact the Budget represents a drop in funding for the public broadcasting sector in general, delivering gains to Sky TV in the process.

Radio NZ must survive another year on 2008 budget levels.

Sure budget restraint is tough. But look at what has happened in Australia with the ABC losing $120 million of funding. Now’s that worth whining about. And there is a link – if you don’t get spending under control, then you eventually do have to do major spending cuts to balance the budget.

Who does this favour? Commercial radio networks such as Mediaworks, the company partly established by Cabinet Minister Steven Joyce. 

This shows the leanings of the CBB, which recently defended the right of TVNZ staff to be Labour Party activists. First of all, so what if Steven Joyce founded Mediaworks. He sold it years ago in a hostile takeover. But the CBB shows their total lack of understanding how hard it is for broadcasters who do not get funded by the taxpayer.

Mediaworks made a loss of $318 million two years ago and $90 million last year. And the CBB has the audacity to complain commercial broadcasters are being favoured.

Mediaworks would love a sugar daddy that can guarantee them the same income as 2008.

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Tamihere sues for $620,000

February 4th, 2014 at 12:00 pm by David Farrar

The Herald reports:

Tamihere is seeking damages of over $620,000 in a suit filed with the High Court on December 23 last year.

The Herald has obtained a copy of Tamihere’s statement of claim and sworn affidavit.

They reveal:

*Tamihere claims MediaWorks had agreed to renew his $10,000-a-month contract for 2014 and he is suing for the full amount after the contract was not renewed following the scandal.

That’s $120,000. Where does the other $500,000 come from?

*Tamihere alleges MediaWorks also failed to publish the findings of an internal complaints review process that found Jackson and Tamihere’s interview with “Amy” had not breached any broadcasting standards.

*Tamihere claims the effect was to allow the public to think Tamihere had been fired for misconduct over his role in the interview but that Jackson had done nothing wrong. Tamihere’s defamation claim is for $500,000 in damages plus costs.

Oh, it’s a defamation suit – not an employment dispute. That will be interesting.

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It’s all Sky’s fault!

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

Clare Curran released:

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

This is bizarre. Clare seems to have a fetish against Sky TV. 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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Receivership for Mediaworks

June 17th, 2013 at 12:40 pm by David Farrar

Stuff reports:

Presenters and staff at embattled MediaWorks will keep their jobs following receivers being appointed to the company, but the taxpayer – potentially owed tens of millions of dollars – will be the big loser.

At a press conference this morning receivers Brendan Gibson and Michael Stiassny of KordaMentha said they had been appointed by MediaWorks’ senior lenders to manage a transition in ownership.

Gibson said senior lenders – owed around $400m – were forming a new company and intended to retain all current staff.

“All the 1400 employees will keep their jobs. We’ll be moving to transfer their contracts at an appropriate time,” Gibson said.

Contracts and payments to suppliers would also be met, and current broadcast programming would be unaffected, the receivers said.

For now, no job losses. But hard to think there will not be some down the road as the receivers cut costs to the bone.

The fate of Mediaworks is perhaps a good comparative lesson for non-commercial broadcasters that are taxpayer funded. They’ve been whining about a funding freeze, while their commercial counterparts would sell their right arm to be able to have stable revenue.


BSA rejects Labour’s complaint on all grounds

October 14th, 2011 at 10:00 am by David Farrar

The Broadcasting Standards Authority has just released its decision on their complaints against the PM hosting a non-political hour of talkback on Radio Live.

They have rejected Labour’s complaint on every ground argued, and their conclusion was:

Our opinion therefore is that even if this programme were held to be an election programme, which we do not consider it was, it would not have breached any of the standards raised by the complainant.

So the BSA has said that in their view it was not an election programme, but even if it was it breached no standard. This suggests that the Electoral Commission are unlikely to find it was an election programme also, unless they radically depart from the BSA’s reasonings.

The real winner in all of this is Mediaworks. They have a tiny listenership, and if Labour had not whined about the one hour show, would have passed without much notice. But thanks to their complaints Mediaworks and Radio Live have had two weeks of publicity about it.

The decision is embedded below.

Radio Works 14 Oct

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Small on mediaworks

April 22nd, 2011 at 9:06 am by David Farrar

Vernon Small writes in in the Dom Post:

I come to defend Steven Joyce, not to bury him. In the fracas over the Government’s decision to let radio companies pay for their licences over five years, rather than pay $96 million up front, he has taken more than his fair share of unfair criticism.

Oh dear. I expect Vernon will now be pilloried on certain left wing blogs.

Suggestions that Mr Joyce, the communications and information technology minister, had some sort of conflict of interest in helping out the Brent Impey-led company (that Mr Joyce established) survives only till you know that Mr Joyce and Mr Impey are . . . errr . . . not close.

Mr Impey, with Canwest, led a successful “unfriendly takeover” of MediaWorks in 2001- that is, one bitterly opposed by Mr Joyce.

I was unaware of this, and not seen this in any other media. It is a good story that adds new facts to an issue.

The minister initially opposed any deal with the commercial radio sector. To protect himself further, he also sought advice from the Cabinet Office and was told he did not have a conflict of interest. It might have been wiser politically for him to step aside anyway, but that is miles away from any wrongdoing.

Those who have never actually worked in business (like most Labour MPs) have no real idea of what does and does not constitute a conflict of interest. They think that any affiliation or association what-so-ever means you must recuse yourself. This is not so. This would see the Minister of Finance unable to own a home, or the Minister of Agriculture unable to be a farmer.

Of course, it fits Labour’s narrative of a Government pandering to the few not the many, feathering the nest of its rich mates and acting as lobby-fodder for business.

But is Labour saying it wants a hands-off approach to business, whether or not that involves job losses?

WE SHALL never know what would have happened had MediaWorks been denied the payment relief and asked to stump up the full $42m at the end of 2009 – as advertising rates were falling, the economic outlook was bleak and banks were ultra-cautious about lending.

If one or more major media companies had failed, more than 1000 jobs could have been on the line. …

Mr Joyce is also blunt about the political fallout if the Government had said “get stuffed” and one of the big companies had collapsed. Once it was known the Government had rejected a deal at commercial interest rates with all the frequencies held as collateral, ministers would have been pilloried as hard-hearted, far-right, hands-off ideologues.

Is there a single person who doesn’t think Labour wouldn’t have done exactly what Vernon writes above, and lashed the Government for destroying jobs if it had refused the deferred payment scheme, and a major broadcaster collapsed?

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The great Mediaworks beatup

March 10th, 2011 at 1:00 pm by David Farrar

The Herald ran a story yesterday headlined “Your $43m lifeline to TV3 owner: and said:

The Government has thrown a lifeline to ailing private media company MediaWorks, which owns TV3, Four, and about half New Zealand’s commercial radio stations.

MediaWorks’ latest accounts show it has essentially received a $43.3 million loan from the Crown to enable it to renew its radio broadcasting licences for the next 20 years.

This got copied all over the place with people aghast that the Government had lent MediaWorks $43m in some secret deal.

However there was no loan and no secret.

In October 2009 (18 months ago) the Government announced:

“The Government recognises that some licensees may have difficulty paying the one-off lump-sum renewal payments for their 20 year spectrum licenses next year.”

Cabinet has agreed to offer an alternative payment option to the radio broadcasters, provided any change is revenue-neutral to the Crown. 

This will allow a series of not more than five annual payments incorporating interest at 9.5 percent, plus inflation. 

So in reality it is a simple deferred payment option – broadcasters had the choice of paying for a 20 year licence in one lump sum, or spreading it over five years at a higher cost. This is no different to what often happen in the commercial world – you can spread payments out but pay more for them.

It’s not a lifeline, and it is not a loan. It is a liability but that is a different thing. If at balance date I have not paid a bill, I have a liability my creditor but that does not mean they have lent me money.

And finally the taxpayer made money from Mediaworks with the deferred payment. The interest rate is 11.2% and the government 6% on its debt, so the Government makes a net 5.2% from Mediaworks.

Sadly far too many will have just read the original story, and will remain convinced that the Government bailed out Mediaworks with a loan.

UPDATE: I notice the original story was front page and the story the next day clarifying things was very small and obscure.

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