John Drinnan 's Opinion

John Drinnan is the Media writer for the New Zealand Herald.

Media: Big bosses, big bucks - big cutbacks

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Chief executive Rick Ellis was paid between $910,000 and $920,000 in the year to June 30. Photo / Dean Purcell
Chief executive Rick Ellis was paid between $910,000 and $920,000 in the year to June 30. Photo / Dean Purcell

Television New Zealand top bosses have scored big pay rises while laying off staff and cutting costs.

The company annual report tabled in Parliament this week showed the highest earner - believed to be chief executive Rick Ellis - was paid $910,000 to $920,000 in the year to June 30, compared to $750,000 to $760,000 for the previous year.

The second highest earner - believed to be head of sales and marketing Paul Maher - earned $680,000 to $690,000 up from $560,000-570,000 last year.

Last year there were 181 people earning more than $100,000 to $110,000 - seven fewer than in 2010.

The pay packages represent salary for 2011 with performance-related bonuses for the 2010 year. Significantly, the 2011 year has been more successful in terms of the dividend to the Government and sales revenue, so many expect executive pay to rise again next year.

If the good fortune holds and Ellis is still around next June - he has long been tipped to leave to be replaced by the solely commercial focused Maher - the CEO role at state TV might well pass the million dollar mark.

The escalating executive pay seems surprising given TVNZ's lacklustre net profits - combined figures for five years are still in the red. There have been numerous layoffs and cutbacks on air over the years and internal critics say the axe seldom touches the significant ranks of middle management.

TVNZ made a net profit of just $2 million last year, less than the combined pay for Ellis, Maher and the next highest paid executive.

But ignoring extraordinary items such as a $17.6 million write for its failed investment in TiVo, TVNZ had underlying earnings of $31.8 million and a dividend to the Government of $13.4 million.

At a commercial level the company appears to have turned around, and is more fleet-footed now the Government has removed its amorphous cultural obligations.

Ad industry sources credit TVNZ with scoring the lion's share of an increase in advertising revenue, albeit helped by disarray and lack of resources at TV3 owner MediaWorks.

Encouraged by National it has developed a close relationship with Sky TV that has hastened the dominance of pay TV at the expense of free television.

The Government says TVNZ's role now is to provide it a dividend, but critics, including broadcaster professionals inside the company, worry the state broadcaster has lost its soul and its brand.

Public channel TVNZ 6 was scrapped in favour of niche youth channel U and TVNZ 7 is to go next year.

SPONSORED NEWS

One News provided one of the most heartwarming news items this year with Christchurch reporter Lisa Davies reporting on the Christchurch Symphony Orchestra visiting the quake and tsunami-hit city of Sendai in Japan, and playing with the Sendai Philharmonic.

This was a truly moving as the musicians from the quake damaged cities joined together seamlessly. Great stuff.

If there was one jarring aspect to the item it was with the One News anchors, who pointed out that Davies' trip had been funded by the Japanese government and by the state-owned New Zealand coal company Solid Energy.

Corporate funding for journalists was once forbidden, but it's increasingly common on overseas stories as newsrooms face tighter budgets. Solid Energy is a major firm in the South Island and sponsor of the Christchurch Symphony Orchestra.

To its credit TVNZ acknowledges such funding arrangements deals. But given the heartwarming nature of the story, the mention gave Solid Energy an even bigger plug that arguably amounted to sponsorship of the story.

Davies will be staying on for more stories, so you can't help but wonder if TVNZ - a corporation that is giving executives record pay packages - should have paid its own way.

TOAST

Many media folk - journalists, dramatists or advertising creatives - are vehemently opposed to be being regulated for the obvious reason that nobody likes being told what they can and cannot do.

The argument is that professional pride, ethics and common sense can regulate standards - which is often the way.

But a complaint upheld by the Advertising Standards authority suggest the ad industry still needs a regulator to keep an eye on standards.

The Vodafone ad made by agency .99 featured an actor picking up a knife and heading to the toaster, and ends immediately before he is about to stick the knife into a toaster with the message: "Another way to get more than you bargained for." Tee hee.

The ASA found it breached the code of ethics for having a due sense of responsibility and not showing dangerous practices or situations that showed a disregard for safety. Which given the nature of the ad seems straightforward.

Yet Vodafone - which had pulled the commercial amidst public complaints - did not think it was a breach of ethics. Neither did .99 and nor did the Television Commercial Approvals. The ad people's view was that everybody knows you should not put a knife into a toaster to get your bread. Tell that to to your eight-year-old.

OVERREACHING

The Broadcasting Standards Authority will be releasing its decision today on the Labour Party's complaint about John Key's MediaWorks radio show.

But even if the BSA finds against MediaWorks - and implicitly against the PM's office for breaching rules for balance in a pre-election period - nobody expects it will hurt his popularity or send him seeking advice from his media managers.

Chief press secretary Kevin Taylor returned from paternity leave recently to find the PM facing rare, aggressive questioning and getting himself into trouble by overreaching himself with the media.

In truth, the Key brand is managed by Key. Many of his fans love his easy-going confidence with media, while others for party political reasons or otherwise find him galling.

We've grimaced at his slightly embarrassing "go the All Blacks" speech at the Rugby World Cup opening, and the cheerful self promotion on the MediaWorks show. But many in the public lap it up. He comes unstuck with uncontrolled and sceptical media questioning, but the topics are seldom of much interest outside media types and political wonks.

His wobbly period with the media came to a head last week when he faced up to journalists over his creative interpretation of speculation from a political source at a Standard & Poor's briefing. Herald political columnist John Armstrong noted last week his body language showed his discomfort.

The one-off John Key hour on RadioLive suited him perfectly - a place where he can say what he likes with guests fed to him by the Prime Minister's office.

On that radio show Key pronounced himself a great fan of Coronation Street.

"Who's home at 5.30?" Key said. "It's got to be moved" and he would talk to "someone important enough to see whether that can happen".

I asked one of Key's press secretaries Lesley Hamilton if he had made such an approach to TVNZ. But Hamilton said absolutely not - and he was never serious about making such an approach.

That was never explained when he was on air. It was just something to say.

BOMBER COMMAND

The left would have us believe that Radio New Zealand's dropping Bomber Bradbury from the panel on Jim Mora's afternoon show is an egregious breach of rights to freedom of speech.

In my opinion RNZ's error was in defining Bradbury's rant last week against Key as a breach of fairness and balance when it could easily have dropped him for ignoring the format and turning public radio into a shrill promotion for his blog.

I don't mind Bomber - you know where he stands and he has broken news stories now and again. But as a guest on public radio he should compile an original view and argue his point and not just recycle old stuff.

Bradbury is a well-known left-of-centre activist so its RNZ's responsibility to ensure fairness and balance - not his.

- NZ Herald

John Drinnan

John Drinnan is the Media writer for the New Zealand Herald.

John Drinnan is the media writer for the New Zealand Herald. 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. He is focused on the business side of the digital revolution in media.

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