Funding for Air NZ
If the Government is going to add more funding to its already generous support of Air NZ, as chief executive Greg Foran asserted on RNZ (Feb 25), I trust it will be increasing its shareholding.
A repeat of what happened after the 2008 financial crisis, where corporate dividends equivalent to unencumbered government bailouts went to shareholders within a few years, while millions lost their homes and jobs, would be unconscionable.
Marilyn Head, Newtown
Television New Zealand more than doubled its profit to just under $34 million in the six months to the end of December, largely thanks to lower programming costs that stemmed from Covid.
Revenues slipped $3m to $175m due to a drop in advertising. But the state-owned broadcaster said it experienced ‘‘positive audience and revenue momentum’’ in the final quarter of last year which had continued into the new year. Because of that, it expected to ‘‘significantly exceed’’ its financial forecasts for the full year to the end of June.
The company’s profit was up from just under $16m in the same period in 2019, thanks to a $33m drop in costs, almost three-quarters of which was attributable to lower spending on content because of Covid.
Chief executive Kevin Kenrick said TVNZ had decided to repay $4.9m in wage subsidies it received last year. The broadcaster said it had qualified for the assistance because of a revenue drop it experienced during the crisis, and the repayment was voluntary.
He assumed TVNZ’s board would review whether it should resume paying dividends to the Crown once it posted its full-year result, but said it made sense to be cautious while the industry remained volatile.
TVNZ reported its result as the Government progresses work on a business case to merge TVNZ and RNZ into a new public media organisation. Kenrick said statements from Broadcasting Minister Kris Faafoi indicated ‘‘a level of commitment’’ to go ahead with the plan, subject to Cabinet being satisfied with the business case.
‘‘The thing that really needs to get teased out via that business case is which content would have advertising and which content would be ad-free.’’
His understanding was Faafoi wanted to establish the new entity within the current parliamentary term. Kenrick has at times appeared lukewarm about that proposal, telling a select committee last February that ‘‘all you are going to get out of a new structure is ‘a structure’.’’
Better Public Media chairman Peter Thompson has expressed doubts about the proposed merger and has called for the Government to share more information on its plan. He has warned it will not be simple to ‘‘glue public service and commercial priorities together in the same institution’’ without significant compromises.
Barrie Saunders, chairman of the Taxpayers Union lobby group, has described the secrecy surrounding the discussions to date as ‘‘disgraceful’’, arguing that the restructuring of public broadcasting should be a cross-party project, involving the wider public.
However, Faafoi defended the merger proposal in October, saying research showed ‘‘the rigid and separate structures’’ of the public broadcasting system had restricted the sort of evolutionary changes that public broadcasters overseas had used to better position themselves.
Kenrick said he heard the call for greater public consultation. ‘‘But at the same time there has got to be something to consult on. Having a whole lot of engagement around a concept that is not fully formed is not going to be that helpful, so I think we need to let government officials do their work to define what it is exactly they see this entity doing.’’
TVNZ has faced some disappointments amid the havoc wreaked on the media sector by Covid. TVNZ appeared to score a huge coup when it secured the freeto-air rights to the 2020 Olympics from Sky in 2019.
That was to have been one of the highlights of a major reinvestment in local content, before the Games were postponed because of the pandemic.
Rival MediaWorks TV, meanwhile, achieved a Houdini-like escape from its financial troubles after that business was bought by the deep-pocketed US broadcaster Discovery in September.
TVNZ said the first half of this year would see ‘‘plenty of live sport action’’, including the America’s Cup, international cricket and ‘‘hopefully’’ the Tokyo Olympics.
‘‘In addition, TVNZ is producing content for its most significant investment in local entertainment content for more than a decade,’’ it said.
PMG Property Funds Management has announced a 50 per cent equity partnership, through its parent company PMG Holdings, with listed Australian-based investment and funds manager, 360 Capital Active REIT.
PMG chief executive officer Scott McKenzie said he is excited by the opportunities the partnership presents PMG’s investors and tenants, and the company’s five unlisted commercial property funds.
“The partnership will strengthen PMG’s proven ability to acquire high-quality New Zealand properties, help us to continue our sustainable growth, and provide greater performance and resilience for our funds and our investors,” said McKenzie.
“We have been in discussions with 360 Capital for over 12 months now, and it is clear we share the same vision and values of placing customers at the centre of all we do, being open and transparent, having skin in the game and helping grow the financial freedom of clients.”
All day-to-day operating and management decisions will continue to be made by the existing PMG executive and investment management team – including PMG chief executive officer Scott McKenzie, chief financial officer Nigel Lowe, and head of investment Daniel Lem.
McKenzie, Lowe, and chairman Denis McMahon will remain on the PMG Board while Dr Wayne Beilby will also remain on the PMG Board as an independent director.
An additional independent director and three members of the 360 Capital team will join the PMG board, adding to PMG’s property funds management experience and growing governance capability.
360 Capital’s head of real assets, James Storey, said the company is excited about partnering with PMG, considering PMG’s solid performance and history over the past 29 years, and the potential they see for PMG and investors long term.
“Like PMG, we are a high conviction investor, focused on long-term sustainable returns for investors,” said Storey.
“As an equity partner, we will bring further opportunities and add value through our many years of investment and governance experience to PMG’s already strong funds management business.
PMG founder and chairman Denis McMahon said the partnership will provide investors with even more confidence in PMG as a manager of their investments.
“One of the catalysts for 360 Capital’s interest in partnering with us has been seeing how we have managed through the uncertainty of the last 12 months,” said McMahon.
“I’m very supportive of this partnership as it will enhance PMG’s ability to continue to sustainably meet our strategic goals in what is an uncertain economic environment.
“I have been actively wanting the type of strengths 360 Capital bring to the table, for a long time, but never felt that we had met a partner who shares our values. It is clear that in 360 Capital we have now found that partner.”
Integral to the partnership, PMG’s existing management team, brand and staff structure will remain the same.