MediaWorks cuts loss, cautions Government
MediaWorks has warned the Government that commercial television could come under more pressure if it doesn’t consult widely and think through its plan to boost public broadcasting.
MediaWorks, which is owned by United States private equity firm Oaktree Capital Management, reported a much improved financial result for 2017, cutting its loss by almost two-thirds to just over $5 million.
Importantly, the company said it was close to replacing a $73 million five-year loan that is due to be repaid in November with a new $95m loan, which would secure the company’s funding until at least April 2022.
Chief executive Michael Anderson expected MediaWorks as a whole would be profitable this year and scotched speculation there was a ‘‘for sale’’ sign over any part of the business.
But he cautioned that the freeto-air television market remained under a lot of pressure.
‘‘To have the Government owning three TV channels – One, Two and Duke – with no publicservice broadcast imperative, competing against one independent broadcaster, means you are potentially jeopardising your one point of diversity of view,’’ Anderson said.
‘‘If you ended up in a situation in two or three years where [MediaWorks-owned free-to-air channel] Three didn’t exist and the only form of broadcast news was government-owned, with a commercial imperative, it would be a very unfortunate outcome.’’
Anderson clarified that he was not anticipating Three’s demise while explaining it was competing in a market that was ‘‘skewed against us’’.
Communications Minister Clare Curran has signalled that the Government is likely to increase public funding for the media by at least $38m a year, after putting aside a $15m ‘‘downpayment’’ in this year’s Budget.
However, its pre-election suggestion that it might allocate most of the extra funding to RNZ so it can get more involved in television has attracted controversy.
Anderson suggested a better course of action would be to make Television New Zealand’s TVNZ 1 channel a non-commercial public broadcasting channel.
TVNZ chief executive Kevin Kenrick said its view was that splitting TVNZ in that way would be in MediaWorks’ interest but cautioned it could cost more than $200m a year.
Anderson, who took over as head of MediaWorks in 2016, is being credited with putting the company on a more even keel.
That is following a tumultuous period under former boss Mark Weldon that saw news and current affairs programmes cut and the departures of popular broadcasters John Campbell, Hilary Barry, the 3D team and former TV3 head of news Mark Jennings.
MediaWorks’ revenues for the year to December were up 1 per cent at $300m, while its loss dropped from just under $15m to a little under $6m.
‘‘We are not for sale at this point in time – we are not on the market and we are not looking to be broken up. That could change tomorrow or in five years’ time – that is an Oaktree issue not ours – but it is not part of anything we are doing at this point in time,’’ Anderson said.
The company’s radio arm had put in a solid, consistent performance, Anderson said, while its television business – though still loss-making – was showing positive ‘‘momentum’’.
MediaWorks said in its accounts that there was still some uncertainty with regard to its November refinancing.
But Anderson said it had received a ‘‘letter of commitment’’ from what MediaWorks described as an external funding provider, and he hoped the new arrangement would be finalised in ‘‘weeks rather than months’’.
Anderson would not say whether or to what degree Oaktree was the lender for its new loan, or what the interest rate would be. ‘‘But it’s been a normal refinancing process,’’ he said.