The Government has thrown a lifeline to ailing private media company MediaWorks, which owns TV3, Four, and about half New Zealand’s commercial radio stations.
MediaWorks’ latest accounts show it has essentially received a $43.3 million loan from the Crown to enable it to renew its radio broadcasting licences for the next 20 years.
The Government appears to have agreed to the deal despite MediaWorks taking the Inland Revenue Department to court over a disputed tax bill. The IRD alleges the company owes $24.5 million in tax, interest and penalty payments from 2002 to 2004.
Telecommunications Minister Steven Joyce yesterday said the money was not a loan, but a deferred payment system to help the radio industry during tough times in 2009
I’m so glad we have a government that only intervenes in the free market when it’s absolutely necessary – like when the Telecommunications Minister needs to bail out a company he used to own.
Hilariously, MediaWorks chief executive attacked Radio New Zealand and demanded its funding be cut right about the same time his own company cut a deal with Joyce to receive a taxpayer funded loan.
A KPMG report says extra cash is needed to remedy severe under-staffing and under-funding at Radio New Zealand.
But MediaWorks – the private equity-owned firm with half of New Zealand’s commercial radio stations – says the squeeze should go on public radio, not be taken off.
MediaWorks chief executive Brent Impey said some of RNZ’s problems arose from being institutionalised and it was outrageous to hear calls for more public cash.
RNZ is looking for 5 per cent ($1.5 million) in cost cuts to meet the latest shortfall. But Impey says cuts should be 15 to 20 per cent ($4.5 million to $6 million) to match the private sector cutbacks.
On Monday, the Herald reported details of the KPMG baseline funding review. The review suggested the $30 million to provide Radio New Zealand National, Concert and RNZ International was about $5 million short.
Impey – who heads RadioLive, More FM, The Edge, The Rock, Mai FM, The Breeze, Solid Gold and Kiwi FM – blasted Radio New Zealand for “crying poor”.
He said calls for extra funding were “galling” when private sector media companies were laying off staff.
RNZ has had constant funding and an increase ($2.4 million) last year, Impey said.
“We [private sector media companies] have had to make paradigm shifts in the way we run businesses to keep them viable.
Having your friend become a senior Minister who is determined to gut public broadcasting while financing your private company is, I guess, a kind of paradigm shift.
Update: Not unusually the comments section is more enlightening than the original post: the point is made that the government offered this deal to all broadcasters during the recession.