Labour accuses Govt of readying TVNZ for sale

Labour is accusing the Government of gutting TVNZ and getting it ready for sale.

Television New Zealand has announced it is cutting a swathe through its daytime programming and axing 90 staff as it fights to meet the Government's tough profit demands.

The state broadcaster is dropping 100 hours of local programming and cutting 17 staff from its newsroom, but its sales team and business ventures like TVNZ.co.nz that it says are "growth areas" are virtually unscathed.

Prime Minister John Key said yesterday that TVNZ had told the Government the job losses reflected changes in the industry and speeded up changes that were already planned for later on.

"They in part reflect the cyclical nature of what's happening at the moment - advertising revenue is weak - but they actually also reflect the structural changes occurring in the industry (to internet and electronic media)."

The Government still expects a dividend from TVNZ because not doing so would effectively be a bailout, Mr Key said.

But Labour's broadcasting spokesman, Brendon Burns, said the changes were driven in part by the Government demanding a dividend from TVNZ.

"The Government's agenda is now unmasked," he said.

"We have seen the first step towards gutting TVNZ and selling it off to the private sector."

The cuts will affect independent programming and programme makers are bracing for details of what local shows will be scrapped.

Meanwhile, TVNZ programming bosses are preparing to buy overseas shows at television markets in Europe on a tight budget but are desperate to buy shows that are popular with viewers.

The Government called for companies to save jobs at the Job Summit but shows no signs of reducing profit expectations from state TV.

TVNZ is not the only media company reacting to the advertising downturn. The Radio Network has also laid off staff.

But the state TV job and programming cuts are in a company that is making generous returns to shareholders while taking taxpayer subsidies.

However, the money-go-round is disrupted when programming and news resources get cancelled.

Asked yesterday why the company was cutting programming and news resources while putting money into "emerging business", spokeswoman Megan Richards said TVNZ faced a balancing act.

"When you look at the long-term future of the company then diversification of revenue streams is a good thing."

Ms Richards said yesterday's cuts were to address the shortfall in funding but should the situation worsen the company might have to review them again.

TVNZ has refused to say which programmes will be scrapped, saying this was commercial information.

"They will be replaced by local programming stock that we already have and overseas content," she said.

TVNZ chief executive Rick Ellis declined Herald requests for an interview. He insisted in a press release that the cuts would not have "a material effect" on TV One and TV2 prime time schedules.

In addition to the redundancies, Mr Ellis, the executive team and senior managers will face salary freezes.

Staff had come up with "a number of cost reduction and savings ideas and many were being actioned".

Reducing the payroll would make up about a quarter of the cost reductions.

The executive director of the TV producers' body Screen Production and Development Association, Penelope Borland, said there were deep concerns about the cutbacks because Television New Zealand was the main source of work for TV producers.

About 11 journalists' jobs have gone in the newsroom, plus a further six jobs for back up staff. Most cuts will be from the Auckland newsroom.

Ms Richards said TVNZ had looked at trimming the current affairs programmes Sunday and 20/20 but decided against it.

Mr Key defended seeking a 9 per cent return on the Government's investment during a deep advertising downturn and leading to job cuts while the Government campaigned for jobs to be saved.

"TVNZ is a media company and they are experiencing what all media companies are at the moment. It's not unique to TVNZ ... . they are making some changes and there are some job losses as a result of that," the Prime Minister said.

"The dividend is recommended and set by the board. That will be done at the end of the financial year. It is quite possible the dividend will be lower than the $10.3 million they paid last year. In the end that will be at discretion of the board.

"If we don't receive a return on that equity and we don't get a dividend, then that's less money the Crown has for hospital beds, less money to pay doctors and teachers. Our revenue is falling as well."

- ADDITIONAL REPORTING: Claire Trevett, NZPA