TV chiefs to challenge big Hawkesby payout

By JAMES GARDINER and LOUISA CLEAVE

Television New Zealand is at the centre of a political firestorm over a payout to sacked newsreader John Hawkesby that could be as much as $6 million.

Embarrassed TV bosses have ordered their lawyers to challenge the huge compensation deal awarded to Hawkesby by a private arbitrator. The award was revealed by the Herald yesterday.

An angry Prime Minister Helen Clark said last night that the TVNZ board had lost control of its management.

"It says a lot about what Television New Zealand had become - market share at any cost, management running riot, loose contracts. Now, that culture is what has to change."

She questioned whether Hawkesby would think it was "moral to take that sort of money."

Neither TVNZ nor Hawkesby will comment on the size of the settlement, but the Herald has been told it is at least $1.6 million and possibly as much as $6 million.

Hawkesby left TV3 to read One Network News on TVNZ last year. But after 24 days the state-owned network bowed to viewer demand and reinstated Richard Long.

The Government has called for a report from the TVNZ board.

Broadcasting Minister Marian Hobbs was briefed yesterday by TVNZ chief executive Rick Ellis and board chairwoman Rosanne Meo, but is being kept in the dark about the sum TVNZ was told to pay Hawkesby.

Ms Hobbs said she did not have the power as shareholding minister to demand the details of the decision but believed the public was "entitled to know the full facts."

TVNZ refused to comment before the Herald broke the story, but then Mr Ellis issued a statement saying an appeal would be filed.

"Expert legal advice" was that there were grounds, he said. "We believe that the arbitrator's decision has serious flaws in it."

Mr Ellis said TVNZ wanted the confidentiality agreement lifted. "We do not want this to be secret."

But in a statement last night, Hawkesby said he had wanted the dispute to be heard in the High Court, where it would get a public airing. This was "bitterly opposed" by TVNZ, his statement said.

"I am delighted by the result and I do not expect TVNZ's appeal to succeed."

Helen Clark said TVNZ should have "had systems and procedures in place which would ensure that top management would not make these sorts of decisions without some reference to the board."

It is understood that the TVNZ board members found out about the arbitration outcome - which had been known to the parties since before Christmas - just two days ago at their regular meeting.

Board members were said to be outraged when the non-agenda item came up at the end of the meeting, both by the magnitude of the finding against them and the apparent failure of their legal advisers.

According to one source, board members demanded the finding be challenged and, when told there were very limited grounds, some suggested that reductions in executive salaries might offset the loss.

There are two versions circulating of the size of the payment the arbitrator decided on. One is that it was between $1.6 million and $1.8 million, based on paying out Hawkesby's three-year contract. The other is that the arbitrator, understood to be retired High Court judge Sir David Tompkins, of St Heliers, found that Hawkesby, aged 52, had little prospect of working on New Zealand television again and, before losing his job, could have reasonably expected a career lasting another decade.

Legal sources suggested that the lower figures, based on the contract period, seemed more realistic, although the higher amount would explain the board's decision to appeal.