John Drinnan: MediaWorks owner tightens reins

New board members, new constitution as Oaktree Capital asserts control.
MediaWorks board member Jack Matthews, back in the days when he was the high-profile head of TelstraSaturn. Photo / Mark Mitchell
MediaWorks board member Jack Matthews, back in the days when he was the high-profile head of TelstraSaturn. Photo / Mark Mitchell

MediaWorks owner Oaktree Capital is more closely overseeing TV3, Four and half the country's commercial radio stations.

Last month, Oaktree set up a new Sydney office to develop Asia-Pacific investments. And at the start of this month, two new directors were appointed to MediaWorks.

Jack Matthews, who lives in Queenstown, and London-based Jonas Mitzschke (who has overseen the company from afar) will join the tightknit, four-person board of Rod McGeoch, Julie Christie, Martin Dalgleish and Paul Lockey.

Chairman McGeoch declined a request for an interview about the changes, but insiders said Matthews' appointment might be an attempt to replace some of the expertise lost through successive management changes.

One said that since joining the board, Matthews had taken a particular interest in processes at the company.

MediaWorks itself made the news lately, when a Newshub journalist leaked information from a Reserve Bank lock-up, embarrassing the company and ending lock-ups for journalists and financial analysts.

There have been other slip-ups, including over-optimistic expectations for taxpayer funding of a 5.30pm soap, which was to have become a foundation of the TV3 schedule.

In previous iterations, MediaWorks had long suffered from excessive debt, brought on by its former owner, Ironbridge Capital.

Debt issues were settled during a period in receivership, with MediaWorks' debt holders - including Oaktree - taking a bath. But since then the company has been riding a roller coaster of negative publicity.

McGeoch would have hired chief executive Mark Weldon, former head of the NZ stock exchange, because of his expertise in capital markets. But media - and especially free to air TV - is a complex business, built on relationships between market players.

MediaWorks has lost advertising market share to TVNZ and Sky TV, but industry sources say the radio arm - representing about half of the commercial radio sector - has been a solid performer, delivering good cashflow.

Jack's back

Oaktree's Sydney office was a move to further develop its $9 billion of investments in the Asia-Pacific region. It has also established a new MediaWorks constitution, which sets a $2 million annual limit on any new investment, liabilities, or litigation by Weldon and his team that has not been approved by directors.

New director Matthews is an American but is well known in this country, where he once ran TelstraSaturn, which created a cable TV enterprise in Wellington and Christchurch. More recently he was head of metropolitan papers for Fairfax Australia.

There are signs that MediaWorks TV has made progress in reversing a ratings slide.

Advertising commentator Martin Gillman says MediaWorks TV is emerging from a revenue fall caused by upheavals in the middle of last year, including the culling of Campbell Live.

Paul Henry has had recent success with improved ratings against TVNZ's Breakfast, and the Dai Henwood gameshow Family Feud has worked well in the 5.30pm slot.


Weldon arrived around the same time that Jane Hastings joined NZME, publisher of the Herald, and there is said to have been a rivalry between the two.

Hastings handled the convergence of NZME's radio, online and newspaper operations. She left this month and has taken a role with her old employer Amalgamated Holdings, heading its Event Hospitality and Entertainment division.

MediaWorks and NZME have big roles in the news and advertising businesses. Both have some extraordinarily challenging terrain to navigate as revenue shifts from traditional to digital media.

In Australia, NZME's parent company APN has been at the centre of change.

The Australian media sector had been preparing for a shakedown, with the expected revision of media ownership rules. However the early election in Australia has put those changes on hold - again - and APN shareholders will now be looking for signs of change at the company's annual meeting on May 11.

A chain of newspapers in Queensland is for sale, and there is speculation about New Zealand assets being split off, in a way that would allow the NZ operation to break away from APN without the need for a public share offering.

I stream, you stream

Australian TV streaming company Quickflix has been placed in voluntary administration. But the founder, Stephen Langsford, insists the New Zealand operation - which is outside the Australian company's administration - will continue uninterrupted.

The Australian operation has had problems due to an equity relationship with another streaming service called Stan, owned by Fairfax and Nine Network.

Langsford agrees that small video streaming firms such as Quickflix face big challenges from corporate-backed initiatives and international players such as Netflix.

The Australian Communications and Media Authority estimates Netflix has 2.5 million subscribers.

In a statement, Langsford said "the management of Quickflix remain dedicated to achieving a successful restructure of Quickflix through a deed of company arrangement that will reposition the listed group to a broader-based digital consumer, e-commerce and entertainment player, leveraging its existing marketing database, data and platform while also pursuing [merger and acquisition] opportunities."

- NZ Herald

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John Drinnan has been a business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s.

Read more by John Drinnan

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