Packer and Maori battle for control of Prime TV

By Nick Smith

Friday 14th December 2001

DEREK FOX: Decision on channel imminent

Agents of Australian media magnate Kerry Packer are in Auckland today to head off a bid by Maori broadcasting interests to buy multimillion-dollar lossmaker Prime TV.

National Business Review sources say the interim board of the Maori Television Service (MTS) has an offer on the Prime table of more than $15 million for the ailing channel.

Despite the denials of MTS chairman Derek Fox, NBR sources are adamant the offer is being considered by Prime chief executive and former TVNZ boss Brent Harman.

Mr Harman would not comment on the details but yesterday said he was in discussion with a number of parties about the future of Prime NZ and hoped to make an announcement soon.

Mr Fox said yesterday: "There are four possibilities that we've been looking at. I've signed confidentiality agreements with a number of people and I'm not going to breach that.

"There will be an announcement when we have something to announce."

The deal with MTS, which is charged with establishing a Maori TV network by the middle of next year, could be finalised by as early as next week.

Today Prime representative Clavell Capital meets with agents acting for Australian broadcaster Channel 9, owned by publicly listed Publishing and Broadcasting (PBL), part of the Packer empire to discuss a counterbid for the station.

Prime has lost millions since its inception, reporting a $A5 million loss in its first year, $A10.7 million loss in 2000 and a $A10.8 loss on November 30.

But financial analysts point to its audience share of about 7%, compared with Prime's revenue share of around 1%.

"Advertisers aren't supporting them because of uncertainty over the future of the station," one analyst said.

If that uncertainty was resolved, there was a good chance revenues could quadruple, making Prime a breakeven proposition.

Prime will also point to the extra transmitters installed on the North Shore and at Remuera, Auckland, to improve coverage and eliminate blackspots, while its new position at No 6 on the Sky digital platform will also add value. On Sky UHF decoders, Prime is No 9.

PBL is keen because it can cheaply replace Prime programming with high-quality Australian content and the shock Maori bid initiated only a few weeks ago has come amid negotiations between PBL's subsidiary Australian Consolidated Press and Prime.

One industry source said: "This is like another Tainui - millions of dollars being spent on an asset that has never shown a profit.

"This is obviously seen by the Maori Television Service as being an easy way to get established, even though there is no synergy whatsoever to what Prime has built up and a Maori television audience."

Mr Fox said it was "public knowledge that we have a capital and operational budget of $6 million" a year, and disputed the "$15 million-plus" figure being bandied about.

But analysts say despite programming being funded by the government organisation Te Mangai Paho, considerably more than $6 million will be required to set up a Maori television network.

Mr Fox: "We'll be a long way down the track in reaching a decision on how we are going to operate by Christmas."

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