Dud programmes cause red ink to flow at TV3

By David Long

Friday 1st December 2000

TV3 has written off $20 million as a result of its bidding war with TVNZ for overseas programmes.

The two networks have bought at inflated prices programmes that have rated poorly, leaving them stuck with shows that will not recoup the outlay when put into an off-peak time slot. The dud programmes might not even be shown.

"We pay nearly twice as much for peak series on a per capita basis than Australian networks," TV3 chief executive Brent Impey said.

But it would be tricky for the two networks to get together to negotiate without opening themselves to allegations of price-fixing.

"It's a difficult one. I've highlighted a fundamental flaw in the industry. We have to be more rational in how we go about acquiring stock." TVNZ wrote off $27 million for the same reason in 1997.

Mr Impey is also urging the government to split TVNZ's transmission arm, BCL, from TVNZ. TV3 and the other broadcasters pay rent to BCL to transmit their pictures.

"This money goes straight to BCL-TVNZ and is used by them as part of their cash," Mr Impey said.

"The industry structures need to be corrected. Television in New Zealand reminds me of radio in the 1980s, where there was a big state player and lots of subsidisation, with the smaller private players snapping at their heals. The state of the industry is such that action needs to be taken."

CanWest New Zealand also announced that the weak New Zealand dollar has cost TV3 $3.7 million in foreign exchange losses on its purchases of US programming.

The TV channel made a net loss of $19.9 million before tax for the year ending August 2000 but said its revenue was up 14% to $95.5 million. The three-year-old TV4 continues to lose money, reporting an operating loss of $4.2 million for the same period.

CanWest's radio interests all made healthy profits, with More FM, Channel Z and The Breeze, posting a profit of $6.9 million, up 6% on the previous year.

RadioWorks, 72% owned by CanWest, reported revenue up 11% to $22.3 million for a five-month period and an operating profit of $4.6 million.

Comments from our readers

No comments yet