While Sky TV and Vodafone have withdrawn their appeal against the rejection of their planned merger, the two still plan to stay close.

Their would-be marriage was halted by the Commerce Commission, over the potential for other players to be shut out by Sky's dominance of premium sports content.

However, the two giants of pay TV and telecommunications seem intent on a de facto pairing, saying they intend to "work together" and build their commercial relationship. But Sky insists Vodafone will not have exclusive access to special deals.

Meanwhile, telco competitors - especially Spark - are keeping a close eye on how the Voda-Sky relationship develops. Spark has ambitions to grow its video content and needs premium sports from Sky.


Why did Sky CEO John Fellet and his opposite number at Vodafone, Russell Stanners, abandon the appeal?

Fellet says lawyers advised them it would take a year to go through the High Court and maybe another three months to win the Sky board's approval.

It would probably cost the two parties $1 million each and, according to Fellet, "it just seemed like a better way was to just to keep working together as we have done." He and Stanners had met monthly to consider opportunities.

He is critical of Spark, which adopted the highest profile in submissions against the merger.

Spark, with its Lightbox subscription video on demand service, is the most active local competitor to Sky TV. It is also understood to be working with TVNZ to get its pay TV content on the Freeview platform, which TVNZ owns with TV3, Radio NZ and Maori TV.

Fellet insists deals for sports content with Vodafone will not be exclusive, and is irritated by negative publicity about the Vodafone relationship.

"Spark just has to stop whining to the press and come in and talk to us about what it is that they want," he says. "Over the next couple of weeks you will hear some more deals that Sky will be doing with other ISPs." At least one deal on sports content is expected to be with 2degrees.

Mathew Bolland, director of corporate affairs at 2degrees, says that without sport content, some potential customers just won't join. While watching to see how things develop, 2degrees also wants to talk to Sky, he says.


Stanners is critical of Spark - Vodafone's main competitor. "I just find it really amusing coming from a company that has consistently not placed value on Sky's offering, evidenced by many things, but particularly by their CEO returning his set-top box."

Odd or evil?

Media coverage of the Todd Barclay affair could be a taste of the election campaign to come. If the 2014 campaign was seen as "wild", there is evidence that the growing role of social media will bring more partisan viciousness to politics.

And there are new media players now, not least the Newsroom website, which is adopting the traditional news values of mainstream media. Breaking the Barclay story has been a boost for the new media venture.

One odd aspect has been the role of the public relations agency Exceltium and an allegation made by its principal Matthew Hooton. As well as being a lobbyist and PR man, Hooton is a columnist for the National Business Review and a commentator on Radio New Zealand.

On June 26, Hooton said on social media: "Newsroom is not a news agency but a PR agency for the Evil Six." The "Evil Six" phrase has been used to describe Barclay's Southland opponents.

Newsroom joint editor Tim Murphy says he finds Hooton's comment "bloody odd", but doubted Exceltium was working for any of the parties involved. "This Evil Six phrase came from Whaleoil [blogger Cameron Slater]," says Murphy.

"It's convenient to make out it is down to six people on a power kick, but [reporter] Melanie Reid has spoken to more people than that."

Last night, Hooton told me Exceltium did not represent anyone involved in the dispute.


Radio New Zealand bosses, who are celebrating the end of the Government's funding freeze, say they are taking a knife to costs.

As RNZ aims to move 50 staff north over the next few years, this column sought details of the broadcaster's travel costs.

In answers to a select committee, RNZ said its 2015-16 spending on domestic travel, accommodation, taxis and rental cars totalled $477,297.

That was down from the previous year, when the figure was $536,610. In earlier years, the annual travel costs ranged from about $450,000 to $480,000.