Local television shows will be early victims of TVNZ plans to slash $25 million from budgets to cover a rapid decline in advertising, TV industry insiders say.
TVNZ yesterday confirmed moves to cut $25 million, about 10 per cent of annual budgets, in the four months before the
end of its financial year.
Chief executive Rick Ellis insisted that no decisions on how to save money and avoid a loss had been made.
But an industry insider said local TV shows such as Wheel of Fortune that receive the bulk of funding from TVNZ - rather than taxpayer subsidies - will face immediate cuts.
The cuts were also likely to limit the number of shows TVNZ commissioned for next year, said a production industry executive. The online service TVNZ On Demand is also vulnerable.
Mr Ellis indicated there may be job cuts. Wheel of Fortune is believed to cost about $30,000 a night but he said sponsor Noel Leeming is committed to the show again this year.
This week Ellis blamed the $25 million rapid-fire cut on the recession.
But a well-placed television industry source said that apart from the advertising downturn - which is affecting all media - TVNZ was facing additional pressure from the Treasury to increase its return by more than 10 per cent.
A spokesman for Finance Minister Bill English insisted the Government had not set targets. "But any state enterprise with falling revenues will have to reorganise themselves."
Most companies are tightening budgets but TVNZ has resolved to make cuts swiftly.
Mr Ellis said: "The impact the global economic recession is having on our advertisers has resulted in a fundamental change in market behaviour and willingness to spend on marketing.
"The decline is now accelerating. We now face the reality that our revenues will be approximately 10 per cent (at current forecasts) off our budgeted business plan.
"We have no choice but to reduce our budgets by about $25 million in the next few months to compensate in order to avoid a financial loss," Mr Ellis said.
MediaWorks TV3 spokesman Roger Beaumont said TV3 was not planning budget cuts.
