John Drinnan on business

John Drinnan is a Herald business writer and media commentator

Media: TVNZ looks into close copycat call

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A sale of MediaWorks would mean new bosses for stars like John Campbell. Photo / Richard Robinson
A sale of MediaWorks would mean new bosses for stars like John Campbell. Photo / Richard Robinson

Television New Zealand is looking into another case where one of its reporters delivered material that largely matched an item on an overseas TV network.

Last month Close Up presenter Mark Sainsbury made an abject apology on the programme after reporter Kate Lynch delivered a report with a script virtually identical to an item on the ABC network.

It was a deep embarrassment for TVNZ news.

In the latest case, a senior TVNZ journalist submitted material whose similarity to an overseas report caused disquiet.

A source said the material was noticed shortly before it was due to be screened.

TVNZ corporate spokesman Georgie Hills acknowledged the incident but said it was "a non-issue, no story went to air".

A review is addressing the way overseas footage is used in news stories.

"Clearly, it's an issue TVNZ takes very seriously," she said.

Some might say that discovering the item before it got to air shows TVNZ's editorial systems are working well.

But the incident is surprising given the apology over the Close Up item and the embarrassment it caused in the newsroom. It raises questions about the culture of the newsroom whose budgets have faced sharp cuts and which has suffered a succession of lapses going back to the Paul Henry debacle last October.

DIFFERENT STROKES?

Blogger and former journalist Brian Edwards has suggested Lynch may have been a scapegoat for failings in TVNZ's editorial processes.

A TV source said the person who had delivered the latest problematic material was more established at TVNZ, and is held in high regard by senior editorial management. So there will be a lot of interest in how standards were applied.

Hills said: "We will not be adding any further comment to the statements we have already made regarding the Close Up story.

"It is manifestly wrong and unfair to draw a parallel with that issue and this scenario."

GOSPEL RADIO

Board backing for televising parts of Radio New Zealand programming is leading to a direct clash between the board led by Richard Griffin and chief executive Peter Cavanagh.

This column reported last week that the board of governors is backing the idea promoted by TV producer John Barnett, but Cavanagh is strongly resisting.

This week Cavanagh declined to talk about "board discussions" and sent a memo to staff saying the board had not backed the idea of Radio NZ with pictures.

But Griffin said the board would ensure there was a trial to examine the idea of televised programmes as the foundation for a public service TV channel run by RNZ.

"It would be fair to say that the chief executive is not over the moon with the idea," he said.

Broadcasting minister Jonathan Coleman said he had been told of the idea and that the board had been encouraged to innovate.

Cavanagh could be excused for blanching at the Radio New Zealand on TV plan.

There are major questions about funding and distribution, among other issues.

The National Radio afternoon show with Jim Mora is expected to be used in a trial but it is still early days.

Cavanagh is a conservative man nearing the end of his career.

Some of RNZ's loyal followers will see management's resistance of the idea as a sign of it maintaining RNZ's integrity against Government pressure.

The danger for Cavanagh's focus on maintaining the status quo and resisting change is that he no longer reports to a compliant board that takes his word as gospel.

'QUALITY ASSETS'

At least two organisations other than Sky Television appear to be circling MediaWorks amid growing expectations the company will change hands later this year.

This would mean new bosses for MediaWorks stars such as John Campbell and Paul Henry.

A consultant for Australian investors said at least two other parties were "taking a look" at MediaWorks assets. He declined to name the parties but queries suggest growing prospects for change.

Lead shareholder Ironbridge Capital rejected speculation about an imminent upheaval at the firm which owns TV3, Four and half the country's commercial radio stations.

"The funds management industry is intended to return money to investors," said Mike Hill of Ironbridge.

"But there is nothing to comment on now," and comments made to the paper might be "malicious".

He dismissed a widespread rumour that Ironbridge had been in talks with two banks, with negotiations in the run-up to November.

"MediaWorks is a high-quality media asset, it's got a great team and a great future. Every media company in New Zealand has gone through some tough times," he said.

Two months ago Allied Irish Bank announced it had sold debt with MediaWorks for 65c in the dollar.

Hill said that was due to the bank's own issues and its divestment with Australia. But financial sources told the Business Herald the 65c in the dollar deal had encouraged other banks to look at the long-term returns from the MediaWorks investment.

BANK ON IT

This column has indicated that Rupert Murdoch's Sky Television is the most likely buyer if MediaWorks goes up for sale.

MediaWorks was bought by Ironbridge at an inflated price during the leveraged buyout boom last decade and despite Ironbridge claims that interest payments are no longer onerous after a debt-for-equity restructuring that made Goldman Sachs part owner, debt remains a big issue in the company.

Operating profits excluding interest payments are okay. Radio provides very good cashflow.

Another company bought by private equity for an inflated sum - Yellow Pages Group - has some indirect associations with MediaWorks.

Yellow Pages is the biggest leveraged buyout of the boom with private equity owners wiped out by banks who wrote off $1 billion, leaving the company with first-tier bank creditors.

Intriguingly, many of the banks that now own Yellow are the same ones with money tied up in MediaWorks.

Under the new regime a board established to run the company includes Brent Impey, a former chief executive of MediaWorks. Impey vehemently rejected any interest in MediaWorks and said he was not in the loop over the issues facing his former employers.

RUPERT AND 3NEWS

Sky Television chief executive John Fellet also insists he has no interest in another television channel. He says he has enough on his plate with Prime.

But it's no secret Sky has plenty of capacity for an acquisition and, as the biggest buyer for TV programmes, could bring new economies of scale.

At 50 per cent penetration some believe Sky has reached its capacity.

But Sky owning MediaWorks opens up a myriad of issues, not least the degree that the Government would continue to back the growth of Sky's TV monopoly and its extension into radio.

In this country, Sky's growing dominance has been largely ignored by Labour and National governments.

Sky has had little new media influence and there is no evidence of phone hacking at assets of News Corp across the Tasman.

But the News of The World phone hacking would have significance if Sky bought TV3 and 3 News.

News Corp owns 42 per cent of Sky and despite lobbyists attempting to differentiate it, Sky Television is very much part of the Rupert Murdoch global media empire.

- NZ Herald

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