90 jobs culled at TVNZ were on the way out anyway - PM

The 90 jobs being culled at Television New Zealand were on death row anyway, the recession has just sped up the execution rate, Prime Minister John Key said.

The job cuts are part of the state broadcaster's attempt to save $25 million following lower than expected advertising revenues.

The job losses announced today come from most areas including news and current affairs, finance and legal, marketing, sports, broadcast services and corporate affairs.

Emerging business - online and licensing - will escape the freeze because they are "the revenue earning and growth areas of the company", TVNZ chief executive Rick Ellis said.

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".

Mr Key said the falling advertising revenue was a "universal media problem".

"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)."

It was an acceleration of changes the broadcaster was planning on making in the long term, he said.

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

The amount of the dividend will be at the discretion of the board.

It would be unfair on other media organisations not to ask for a dividend, Mr Key said.

"From the Crown's point of view we have $200 million invested in TVNZ, that's the equity in TVNZ, if we don't receive a return on that equity and we don't receive a dividend, that's less money the Crown has to pay for hospital beds, less money it has to pay its doctors and less money it has to pay its teachers.

"Our revenues are falling as well."

Mr Ellis said the 90 redundancies represented 25 per cent of the cost reductions.

Savings were also expected to be made from the programme commissioning budget (100 hours of local content to go) and departmental operating budgets (worth 10 per cent of cuts).

"The impact on TV One and TV2 prime time schedules is not expected to be material.

"The news and current affairs programme line-up will remain unchanged."

A "small number" of people will go to a four-day working week and others will move from full-time to part-time.

Mr Ellis said the outlook was "uncertain for advertising-reliant media around the world".

The Engineering and Printing Manufacturing Union and Public Service Association said in a joint statement the dividend expected to be paid to the Crown was enough to pay for the 90 redundancies.

"That's 90 families who are going to be sent to the dole queue in the middle of a recession because of the Government's ideological commitment to squeezing out a dividend at all costs."

Labour broadcasting spokesman Brendon Burns said the Government had shown "callous indifference".

"The Government's agenda is now unmasked. Today has seen the first step towards gutting TVNZ and then selling it off to the private sector."

Green Party broadcasting spokeswoman Sue Kedgley said the Government had no credibility after calling for private businesses to save jobs when its "own policies are causing widespread job losses".

In the year to June 30, 2008, the broadcaster paid the Crown a dividend of $10.3m after reporting an after-tax profit of $19.4m.

TVNZ will decide this year's dividend after the annual accounts are audited around August. The company has a policy of paying a dividend of 70 per cent of profit after tax.

- NZPA