John Drinnan on business

John Drinnan is a Herald business writer and media commentator

Media: Public service television all but gone

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John Campbell. Photo / Supplied
John Campbell. Photo / Supplied

The Government is set to abandon digital channel TVNZ 7 and the last remnants of public service television.

A well-placed source said that - as expected - the Government would not be extending taxpayer funding for TVNZ 7 past June next year.

Beyond that, it is expected the Government will no longer require TVNZ to deliver anything other than profits.

The future of TVNZ 7 as a public service channel is dire and TVNZ is increasingly turning its attention to pay TV.

TVNZ has made it clear that if taxpayer funding is not forthcoming, TVNZ 7 is toast.

Shows such as Backbenchers and Media 7 will likely fold unless they can be reinvented in a commercial format and win New Zealand On Air funding for a commercial channel.

Backbenchers staff expect to finish after this year's election.

In what would be another major boost for Sky TV, the Government is also expected to ease rules so local programmes on pay channels receive taxpayer funding through New Zealand On Air.

A well-placed source said the Government will give state TV no obligation other than making a 9 per cent return on assets.

Asked yesterday why TVNZ remained in public ownership with no social obligations, Broadcasting Minister Jonathan Coleman said it had a valuable role in returning profits to the Government.

Television New Zealand chief executive Rick Ellis met staff associated with TVNZ 7 yesterday after rumours circulated at the channel.

Ellis told staff that the final decision had not been made.

But political insiders said Coleman had been unable to convince pivotal figures in the Cabinet, including Communications Minister Steven Joyce, to find a way to save the channel.

In a staff memo Ellis said: "At the moment, 20 to 30 full-time equivalent roles are directly or indirectly related to TVNZ 7.

"It's important for you to know that if a decision was made soon not to extend the funding, we would be in no rush to make decisions about those jobs because TVNZ 7 will be on air at least until the end of June 2012."

In a pivotal move this week - and as planned - the state broadcaster ended TVNZ 6 and moved local programming to TVNZ 7, including a daily two-hour Kidzone show for preschoolers.

TVNZ 6 will re-emerge on March 13 as a commercial youth channel called U featuring interactive youth programming.

But in a new initiative TVNZ revealed it would start a 24-hour Kidzone channel on Sky TV in May providing a venue for social obligations outside 7.

The new channel will have 30 to 50 per cent local content.

COUNTING THE BEAT

TV3 on-air promotions feature The Swingers' song, Counting the Beat. But the big problem is counting the debt for MediaWorks and its parent company GR Media.

One of the problems of reporting on companies controlled by private equity is securing results.

But sometimes they are happy to report ebitda, or operating profit.

On February 25, Ironbridge Capital-controlled MediaWorks published earnings before interest taxation, depreciation and amortisation for the year to August 31, 2010.

The company earned $50.1 million - a 10.6 per cent improvement on the preceding year's trading result of $45.3 million.

Managing director Sussan Turner said it was a creditable result in a changing market.

Consolidated revenue across the group - which includes TV3, Four, and half the country's commercial radio industry - was $257.7 million for the year, up only slightly on the $255.6 million of the previous year, suggesting that the improvement came from cost-cutting rather than advertising.

But the main reason the company is challenged is debt dating back to its 2007 purchase for a top price at the peak of the private equity buying boom.

And the company is less enthusiastic about revealing the net profit earned by the company - after interest payments to bankers.

In the previous year, and before capital restructuring, debts had amounted to $91 million a year - though that has been reduced under deals that swapped debt for equity.

Company secretary Clare Bradley said the net profit figures incorporating interest payments had been lodged but MediaWorks declined to release them until they had been posted.

This would have given a clearer view of the company's financial situation and its relationship with bankers.

ALL ABOUT JOHN

No doubt John Campbell displayed honest human emotions blasting Ken Ring in his interview on Monday night. But that was not what was called for.

The performance drew howls of criticism and the next night Campbell apologised profusely to the purported earthquake predictor.

Maybe, John, it's time for a break - time to think about the dangers of being larger-than-life and bigger than the story.

The incident breached Campbell's code of politeness but that is not why it stands out.

It was bad because the interview was "all about John".

In a debate between science and pseudo-science, viewers were left thinking that Ring was the rational one. I'm loath to linger over this storm in a badly shattered teacup.

Campbell seemed stressed out and everybody makes mistakes.

This should not undermine TV3's strong coverage of the earthquake.

Indeed, TV3 had adeptly refuted Ring's arguments in a filmed item that ran before the interview. Beyond the demands of commercial current affairs was there need to have an argy-bargy on screen? Or were decisions clouded by a need for Campbell to let off steam?

Campbell offered Ring the chance to go back on TV to discuss his supposedly odious theories at greater length. Ring tactfully declined.

Campbell often wears his heart on his sleeve but did TV3 need to inject more emotion?

When he arrived in Christchurch, Campbell's manner seemed out of sync with the event - certainly compared to the restrained Mike McRoberts and Rachel Smalley and even Simon Dallow and Corin Dann, for that matter. Campbell was a larger than life personality when life in Christchurch was plenty large enough.

STAYING PUT

People ask publisher Wes Davies if he is leaving Christchurch after the earthquake.

"But why would I?" said the expatriate Aussie, who moved to Christchurch from Armidale, New South Wales, 17 years ago.

Davies runs publishing house SW Media from his home near Hallswell and was hardly affected by the quake.

He said he had been lucky and the only impact had been the stream of friends passing through to use his shower.

Far from leaving Christchurch, he recently completed a deal to take over Classic Driver and NZ Today magazines to add to his online classic car sale website www.simplyclassics.co.nz.

Classic Driver and NZ Today have been published by Tangible Media since March 2009 in a joint venture with veteran motoring publisher Allan Dick, who will continue in his editorial roles on both.

- NZ Herald

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