Ralston on TVNZ

Ian Fraser, who was and is a big champion of public broadcasting, has said that TVNZ has impossible conflicting objectives to be both a commercial and public broadcaster.  Now Bill Raltson has said much the same, but with damning detail.  You really should read the whole thing, but some extracts:

I spent nearly four years there and, yes, I made some dreadful mistakes. Apart, perhaps, from Helen Clark, we all must concede occasionally we make mistakes.

Probably the worst error I made was accepting the job in the first place because the fundamentally flawed nature of the company makes it almost impossible for anyone to succeed in a TVNZ management role.

TVNZ is a Croc. I am not being rude here, that’s what you call a Crown Owned Company. This means it has a shareholder that is schizophrenic. As a shareholder, the Government wants a 9 per cent return on capital invested but it also wants, through the charter, a non-commercial social dividend. The Government wants to have its cake and eat it too and that just doesn’t work.

Making a 9 per cent dividend is tough enough in the media market today but when the charter requires you to spend precious revenue on programmes that will never make a buck, it’s plain suicide, because it creates a backwash of financial pressure that undercuts the whole business.

TVNZ has a politically appointed board. I believe that means in the past the board was often more interested in sucking up to its political masters than running a business. Board members also turn over at an incredibly high rate, compared with the private sector. Those short-serving board members usually have little or no knowledge of the broadcasting business and, indeed, because they’re politically appointed sometimes have little knowledge of business itself.

In short, TVNZ is dysfunctional because it’s designed that way. Its management often talks about the TV One or TV2 “family”. If TVNZ was a family, CYF would have been called in long ago.

Heh, nice line.

You cannot run TVNZ as a purely commercial business because lunatic political considerations constantly intrude.

Take, for example, Helen Clark’s aversion to paying presenters large salaries. Her stand has cost the company tens of millions of dollars and has been a major factor in bringing the place almost to its knees.

We put together a business case showing if we lost Judy, the impact on ratings would be significant and we’d lose many millions of dollars in advertising revenue as our audience decreased. In comparison with the potential losses, her salary increase was insignificant. Rightly or wrongly, it was a straight commercial business decision. The outlay is worth it when balanced against the return and the potential cost of not doing it.

The board accepted the business case and approved the salary contract. I passed a signed copy to Judy. But then one board member dissented, threatened to resign and went to the minister.

The board panicked and instructed Ian Fraser and myself to kill the contract, physically retrieve it from Judy and hand her another contract for a lot less cash.

Judy, for the first time in her career, suffered huge public abuse and One News ratings began a nose-dive from which it never recovered.

Cue Susan Wood. The year before the board had approved her salary of $450,000. Now, after the Bailey debacle, I was told the board wanted to cut Susan’s salary by $100,000, presumably to reduce the risk of another beating from Helen.

Now, I’ve never seen people react well to a 22 per cent pay cut and Susan was no exception. She immediately engaged lawyer Mei Chen who went at TVNZ like a rabid chihuahua and within weeks the row went public and the effluent was again flying around the building.

This fiasco damaged poor Susan’s reputation, hit Close Up’s audience and, I think, was a big part in her sad decision to quit a year later, exhausted and discouraged.

The only real hope is for some kind of non-partisan agreement by the politicians on making TVNZ completely independent of government and they need to decide what they want the network to be: A public broadcaster or simply another commercial channel? It cannot do both. That much is clear from the calamities of the past seven years.

I do hope National comes out with a bold policy in this area. The status quo is not workable. I would like to see some sums around selling off TV2, and having the interest from the sale, the current charter money and most/all the NZ on Air money go towards TV One as a dedicated public broadcaster.