So much for market forces. The future of the radio industry was decided behind closed doors in talks between industry incumbents and a former industry player, and signed off by Cabinet.
Communications Minister Steven Joyce is defending a sweetheart deal where taxpayers essentially loaned radio frequencies worth $43.3 million to MediaWorks, a company already laden with debt.
Parts of the wider deal between the Government and radio industry remain secret, such as the identity of eight other radio companies which took up the deferred payment option for 20-year leaseholds on frequencies because they could not afford to pay them in one whack.
The minister's office is considering a request for those details under the Official Information Act.
Joyce's office reacted hard and fast to an article in Wednesday's Herald with a note threatening a Press Council complaint if the article was not corrected to his specifications. The Herald is standing by the story.
The article revealed that in 2009 - in the midst of an advertising slump - the Radio Broadcasters Association warned about potential disruption from the global financial crisis as it faced the renewal of frequency rights from April 1 this year. Under a deal negotiated with Labour, the industry as a whole faced a $96 million bill. Some did not have the money to pay up to retain their frequencies and stay on air.
National intervened, and the Government allowed them to keep the frequencies and pay the money over a 50-month period - paying 11.2 per cent interest a year.
The Crown held a mortgage on the frequency with a strong security.
Essentially, taxpayers have loaned frequencies to keep incumbents on air.
If anybody else could have picked them up and paid cash - then tough luck.
You could argue that the deal makes some sense amidst the dramas of the global crisis and an unprecedented slump in advertising.
Joyce says the market for radio frequencies - and the return to taxpayers - could collapse if some of the bidders disappeared.
Yet this was the principle that underlined what is the world's most laissez-faire broadcasting system: the invisible hand of the market decided, not the intervention of politicians in behind-the-scenes talks with incumbents.
National reverted to old ways of doing business.
The Government says it was open about the deferred-payment loans announced in October 2009 - it even issued a press release.
But the scale of the scheme was never spelt out, including that it had been picked up by MediaWorks - which makes up about half of the radio industry.
Details were revealed when MediaWorks' parent company, GR Media - controlled by Australian private equity company Ironbridge Capital - lodged its accounts with the Companies Office.
In results to August 31, it says four times that the deal was a loan. Joyce and the Government are passionately averse to that word - yet that was how Joyce himself described it in Parliament on Wednesday.
Not all radio companies took up the 11.2 per cent loans. Christian Radio Rhema secured no-interest loans - from an angel investor, I guess you'd say - while the country's largest independent station, the Eastern Bay of Plenty's 1XX, secured funds on the commercial market, and for less than 11.2 per cent.
MediaWorks biggest rival, The Radio Network - half-owned by Herald publisher APN News & Media - did not grab the taxpayer lifeline.
Lots of businesses went to the wall and industries came under pressure in the global financial crisis - but not all were thrown a lifeline like the radio industry.
What makes broadcast media companies so special that they should get such political attention?
David Innes, the executive director of the Radio Broadcasters Association, lobbied Joyce for the the delayed-payment loans alongside John McElhinney, chief executive of The Radio Network - the other half of the radio duopoly that dominates the New Zealand radio industry.
Intriguingly, TRN backed a scheme that has been valuable for its biggest competitor. Innes said that the radio industry was in a unique position obtaining the 20-year leasehold on assets (the frequencies) held by the state.
Let's not forget that 21 years ago the private radio industry barely existed. The Radio Hauraki pirates had broken the state's control in the sixties, but the privates and FM took off only with the Radio Broadcasting Act in 1989.
Joyce, a broadcasting entrepreneur himself, made his personal fortune from the radio business in the 1990s.
Joyce's own private radio company, RadioWorks, merged with Radio Pacific way back in 2001, which was the foundation for the MediaWorks company now owned by Ironbridge Capital.
There is no rule against a National Cabinet minister supporting a private sector industry.
But as the Government calls for public sacrifices, it appears Joyce is aware of perceptions about his advocating cost-neutral support for an industry where he had a past association.
Joyce's office said that when the payment deferral scheme went through Cabinet in 2009, he sought clarification that he did not face a conflict in relation to this matter.
"The minister also consulted widely with his colleagues and made sure they were aware of past associations."
"The minister's association with RadioWorks ended in 2001, aside from a six-week announcing cameo on one of the company's stations in 2005," the minister's spokeswoman said.
What was the role of Broadcasting Minister Jonathan Coleman in this loans affair? Not much, it seems.
Broadcasting is always a backwater portfolio, but with so much of the attention on internet television, Joyce has the ear of Prime Minister John Key.
The next big issue for broadcasting is Sky Television's growing dominance of internet TV content, being considered for a review by the Commerce Commission.
Before that had begun, Joyce told the Herald there was no need for regulation of content. Elsewhere, sources say Joyce has been a key player in recent Cabinet discussion about the future of digital stations TVNZ 6 and TVNZ 7.
After hopes it might be the foundation for a public broadcasting TV service, the Government's decision has been to pull back from funding digital channels. So 6 is being turned into a commercial youth channel called "U", and 7 is unlikely to survive past July 2012.
SKY AND RADIO
Free-to-air television has plenty of challenges - but MediaWorks' managing director Sussan Turner is correct in saying that the company is trading successfully at the moment.
Earnings of its parent company, GR Media, before interest taxation, depreciation and amortisation (ebitda) show a $50 million profit.
I imagine private equity owners Ironbridge Capital would happily entertain offers for the firm right now.
Financial results may suggest the company's main issues relate to its capital structure - so presumably a well-structured buyer with less debt could conceivably deliver better net profits.
The obvious place to look for a buyer is Australia.
But in this country the first place you would look for a new owner of TV3 is Sky Television - the Rupert Murdoch-controlled, pay-TV juggernaut that has a monopoly on pay TV and increasingly dominant content rights for the new era of internet TV.
Sky's chief executive John Fellet agreed he "never says never" but insists he is not looking to buy MediaWorks.
It's understood Sky would be more interested in radio assets rather than TV3 and Four, and a source said there were once some tentative inquiries.
Sky is extraordinarily cashed up, and while we don't know future demands for special dividends by 44-per-cent owner News Corporation, it would have no problems obtaining debt.
The question is whether the price for MediaWorks will get higher as time goes on, or lower.By John Drinnan @Zagzigger Email John