Four's fate at stake amid TV shuffling

Fox shows such as Glee dominate the Four schedule but now MediaWorks wants to renegotiate its 10-year deal with the Hollywood studio.

Twin-channel idea on hold as MediaWorks tries to shift goalposts.

The future of the MediaWorks network Four is at stake as the cash-strapped company tries to renegotiate programming deals with Hollywood studios including Fox TV and Universal.

The strategic direction of the second-tier channel is in limbo while the new owners define its content and whether it can continue with the "twin-channel" strategy.

The company says it is "business as usual" on Four and it is selling ads for the next three months.

Four aims at a slightly younger audience than TV3 and takes just a fraction of TV3's ad revenue. But the younger focus enables it to pick up some ad revenue that might otherwise go to TV2 or Sky TV.

Programming from Fox, including shows such as Glee and Family Guy, dominates the Four schedule. But now MediaWorks says the deal is null and void and it wants to renegotiate.

The loss of Home and Away to TVNZ has come as a shock at MediaWorks' TV3 because it plays a key role in drawing audiences to 3News and Campbell Live.

A well-placed source claims MediaWorks has taken an aggressive approach to the studios when abandoning deals.

In Australian cases the broadcaster had told programme suppliers: "Look, we're broke, you don't want to lose us from the market, let's renegotiate," the source said.

"MediaWorks' approach has been to say, 'We're in receivership - here's what you get, take it or leave it."'

The major problem is that using receivership to get out of onerous contracts, which MediaWorks' new owners see as a way to ease debt, carries an element of risk.

Both TVNZ and Prime are circling to pick up more jewels in MediaWorks' crown.

In the days when MediaWorks was listed, Four was a low-cost alternative channel, working on the basis that New Zealand was too small to sustain five full free-to-air networks.

In a pivotal decision after chief executive Brent Impey left, a board appointed by Ironbridge Capital opted to ramp up content and signed another deal with Universal Studios.

Interests linked with the new firm, which has a board of three that includes Julie Christie, have criticised management for renewing the Fox contract for 10 more years in 2009, saying the commitment weighs heavily on the ability to make a profit.

The deal was signed when Fox TV had hit shows bringing in ad revenue, but Modern Family now the only clear-cut Fox hit.

Supporters of the previous management say the Fox deal added important security for MediaWorks.

Twin channels

* MediaWorks' programming deal with Fox TV is the foundation for its "twin-channel strategy".

* TV3 and Four compete for ads with TV One and TV2.

* MediaWorks is trying to use receivership to renegotiate programming deals to save money.

* Now the twin-channel strategy is under pressure, with TVNZ and Prime vying for some shows.