KEY POINTS:
Sky Television believes that its free-to-air network, Prime, is breaking even.
But it was impossible to know by looking at its half-year results, issued last week.
Break-even is an impressive achievement given that Prime has been haemorrhaging money for years.
When Sky bought it for $30 million last year it was headed for a loss of $4 million to $5 million.
But the lack of a verifiable breakout for Prime costs makes it hard for Sky to disprove claims by TVNZ and CanWest that Prime is being subsidised by Sky's pay television operation.
Sky said last week that Prime was partly responsible for the small downgrade in its full-year profit forecast.
The purchase has increased Sky's exposure to the advertising business with advertising going from 5 per cent of its total group-revenue to 10 per cent.
So it was surprising that none of the analysts and brokers at the recent half-year results briefing in Auckland took serious issue with the Sky approach.
Sky did release breakdown revenue figures for Prime.
But when it came to costs it was all too hard.
For instance, advertising on Prime and Sky is sold by the same team and Sky said it was impossible to split costs.
The Prime headquarters at Albany, north of Auckland, houses an advanced new studio and satellite delivery operation used by the pay operation.
Questioned by one analyst about the lack of a breakdown: chief executive John Fellet responded: "How would Sky value the cost of delivering of free-to-air rugby through Prime?"
It had previously been sold to TV3, Fellet said, but that price was no longer relevant because TV3 had indicated it was no longer prepared to pay as much.
Which sort of makes sense. But if it cannot provide separate accounts for Prime now, you wonder how it will estimate its profit in the future should it ever wish to sell its free to air channel.
Plausibly, Prime might never have made a profit on its own.
But Sky's unwillingness to break down costs only gives credence to allegations that the pay monopoly bought Prime largely to extend its muscle in the international programme-buying market and to undermine CanWest and TVNZ.
Quote, Unquote
Politicians love to say they have been taken out of context by the media.
An article in the Auckland community magazine Ponsonby News appears to be a case where that is true.
The magazine featured a front-page article in the March issue harking back to the "Big Gay Out" for the gay community and a picture of Cabinet ministers at the event. They included Culture and Heritage Minister Judith Tizard, Prime Minister Helen Clark and gay Environment Minister Chris Carter. Underneath was the headline - "It's about having pride in who we are" - and the story went on to laud the Government and its support for gay causes. One excited contact misread the headline and thought it was suggesting everybody in Ponsonby and Grey Lynn was gay, which was amusing but not correct.
Publisher Martin Leach said the headline was taken from a quote that Helen Clark had made at the last "Big Gay Out".
For the record, the PM's full quote was: "People should be proud of who they are. Regardless of gender, sexuality, ethnicity, culture, faith, we should be proud of who we are." Ponsonby News' Leach did not believe the headline was misleading.
Bring Out Your Dead
The same week that TVNZ announced it was laying off 50 news staff, the broadcaster issued invitations in its internal newsletters about expanding the number of freelance news editors.
The move to contractors may explain how TVNZ was going to cut staff while developing a new 24-hour news channel, but not how the move will affect its aim to cut the news budget by $10 million, or 20 per cent. One sceptical staffer suggested the change was aimed at "casualisation of labour by stealth" - and partly a reaction to increased unionisation of the newsroom. The layoffs are part of a restructuring that another staffer said was aimed at moving people off the current affairs shows Close Up, Sunday and the tabloid magazine show 20/20, and moving resources to its haemorrhaging One News operation.
One News has been given a more powerful role in commanding resources but even some staff say it will be hard to stop the rot in ratings. Through mis-marketing and numerous political crises, One News has lost the ascendancy and some senior staff say it needs a radical change. Moving to a later half-hour bulletin and ramping-up the late news is an option, but one that is unlikely to be taken up.
Close Up
One of the surprising names on the list of staff dropped in the restructuring is Maryanne Ahern, who has worked on charter programmes including the Kim Hill show Face to Face and has produced at National Radio. Ahern - who has a very strong rapport with Close Up host Mark Sainsbury - has also occasionally filled in as executive producer of Close Up, whose regular executive producer is Paul Patrick.
Unfortunately for him, Patrick is on the committee that is involved in the cuts and has to wave goodbye to someone who has been his able deputy. It must have been difficult to be part of a process which is getting rid of someone who had stood in for him so ably in the past.
Meanwhile, spotted around the corridors of power at TVNZ was Mark Boyd, the editor at the Australian semi-commercial channel SBS and a former staffer in the TVNZ newsroom.
There has been speculation that his SBS news boss Paul Cutler, another TVNZ executive, is coming back to run news. Maybe the two will come as a job lot.
