John Drinnan

Media writer for the New Zealand Herald

A dose of reality for new-look TV3

MediaWorks preparing for post-receivership focus on fewer big-studio deals and more shows like X Factor.

Paul Maher says TV3 won't pull back from news, current affairs and drama in spite of favouring reality shows. Photo / Sarah Ivey
Paul Maher says TV3 won't pull back from news, current affairs and drama in spite of favouring reality shows. Photo / Sarah Ivey

The new-look TV3 aims to boost profits by peeling back its big output deals with Hollywood studios such as Fox and NBC.

MediaWorks is preparing for a new start with its former lenders taking over ownership of the firm. It officially comes out of receivership on September 30.

MediaWorks Television chief executive Paul Maher says the firm is not pulling back from genres where it has a high profile and acclaim - news, current affairs and drama.

He wants more reality shows such as The X Factor and The Block which appeal to advertisers and have interactivity with viewers.

Maher says MediaWorks will use savings on overseas programming deals to fund more local content.

But the strategy relies on continued taxpayer support from NZ On Air for commercial shows as it did with The X-Factor.

The approach will require nimble negotiating skills as TV3 seeks to maintain international business - something built on relationships.

Maher is still smarting from Television New Zealand poaching the TV3 5.30pm show Home and Away.

Home and Away was a pillar of its early prime-time line-up - one that delivered a young audience to 3News and boosted ad revenue.

TVNZ is estimated to have paid distributor Endemol 30 per cent more than Mediaworks for Home and Away.

But given the value of the show to TV3, there are questions about whether the bankers will be good proprietors for a media business.

It is understood MediaWorks lost out in part because its lenders - soon to be owners when receivership ends on September 30 - would not allow the company to make a commitment to buy the Aussie soap until it went out of production.

The lenders took the extreme option of receivership partly because it made programming deals - like this one for Home and Away and those for Fox and NBC - null and void.

It allowed MediaWorks to renegotiate and trim back on the shows it buys. But the fate of Home and Away revealed the risks of losing successful shows.

Maher says the shift away from output deals has been part of MediaWorks' strategy for a long time.

"These output deals just don't work any more," he said. "We are in conversation with Fox to have the best deals without spending significantly ... deconstructing those deals."

The aim, Maher says, is to use savings to boost local content, whether reality drama or news and current affairs, that is more reliably commercial and a draw for viewers.

Sometimes, as with the new series of the reality show The Block, the cost of commercial reality TV shows is funded by extensive product placement and advertorial content.

But at other times, as with The X Factor, the shows are built on taxpayer subsidies from NZ On Air.

Maher appears confident taxpayers will continue to provide this platform for its growth funding commercial shows.

Elsewhere he is "hopeful" that TV3 will be able to continue with a raft of news and current affairs.

TV3's Campbell Live has made a name for itself with serious prime-time current affairs while TVNZ has abandoned the news and current affairs genre at 7pm.

Maher says although TV3 is unlikely to screen four drama series as it did last year, MediaWorks is still committed to drama.

He said he would like to see a lot more shows like The X-Factor and The Block - because they were big winners with audiences and advertisers alike with a lot of online interactivity.

"Reality or event television is part of our vision. It's about building reality or event TV shows that people engage in and it creates a lot of opportunities for advertisers, formats and brand."

Maher is a relative newcomer to TV3 having defected from TVNZ 18 months ago. He has shaken up the sales operation and after years in the media buying industry knows his way around commercial TV.

It is still unclear what influence the new board at MediaWorks will have on the new-look company.

The board for the new firm is chaired by Rod McGeoch, a well- known company director and former chairman of SkyCity Entertainment.

Fellow Australian Martin Dalgleish has a background in new media and is working for former Nine network owner PBl.

More names are tipped for the board.

Perhaps most significant at the TV arm will be the role of the most high-profile director, Julie Christie, the owner of the Living and Food channels and founder of the successful production company Touchdown.

"Julie knows what the consumer wants and has incredibly good experience," Maher said. "She adds a huge amount of value on our board."

Who owns MediaWorks Holdings?

United States private equity firm Oaktree Capital emerges as the biggest shareholder with 26.7 per cent. Lender RBS will hold 21.9 per cent, private equity firm TPG Capital 15.7 per cent, Westpac Banking and Rabobank each will hold 14.6 per cent, and JPMorgan will hold 6.5 per cent.

- This story has been amended: An earlier version said MediaWorks Holdings chairman Rod McGeoch "is" chairman of SkyCity Entertainment. He is in fact a former chairman.

- NZ Herald

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