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Scandal rocks TVNZ; digital ditched

Kiwi web faces $3 mil payout to anchor

AUCKLAND, New Zealand — Rarely in the turbulent history of Kiwi television has a network gotten itself into such a muddle: Last weekend, pubcaster TVNZ’s board and management were under fire from all quarters over separate issues that together spell the end of the web in its present form.

For nearly a decade, the pubcaster operated successfully in a small but highly deregulated broadcasting environment. In that time, TVNZ salaries, especially for anchors, were always high by New Zealand standards.

This week, though, Kiwis were astonished to learn that TVNZ had agreed to pay evening news presenter John Hawkesby a salary of NZ$770,000 ($380,000). He rejoined the web in January 1999 after a stint at rival TV3, but the move was so unpopular with viewers that they switched to TV3 in the thousands. As ratings dipped, TVNZ dropped Hawkesby 24 days into what is believed to be a six-year contract.

$3 mil payout

If the salary raised eyebrows, so too did this week’s revelations that an independent arbitrator, called into settle the contract dispute between Hawkesby and TVNZ, had found for the anchorman. TVNZ now faces a payout of nearly $3 million to Hawkesby but has filed papers in the High Court contesting the decision. Both parties are now bound by confidentiality, but the scale of the salary and the possible payout created damaging political fallout for the web.

At a press conference, Prime Minister Helen Clark was scathing in her condemnation: “I think we can say there has been a spectacular failure at the management level with respect to the Hawkesby contract. No reasonable member of the public would think otherwise.”

TVNZ execs added fuel to their own bonfire by blaming former head of television Neil Roberts, saying the contract deal had been “driven” by him. But Roberts left the company in April 1998 and died from cancer that November.

Digital rejected

If the Hawkesby deal represented a major embarrassment to the web, then what followed after a Cabinet meeting on Monday was a body blow. The government refused to approve TVNZ’s plans for a $110 million multichannel digital network.

Clark told reporters that there was a “considerable element of risk” with losses forecast for the first eight years and the investment not recovered until 2013, assuming targets for take-up were met.

Before it was rejected, the digital proposal had already proven costly to TVNZ in other ways. Rupert Murdoch-owned pay TV operator Sky holds the rights to all major sports in New Zealand. When it learned TVNZ was planning a rival subscription service, it switched free-to-air rights for major sports from TVNZ to TV3.

The digital proposal was always at odds with the new center-left coalition’s aim of returning TVNZ to its former role as a genuine public service broadcaster. The government now aims to proceed with this effort urgently. One result will be a TVNZ that will work to a charter and will not, according to government ministers, have profit as its major priority.

Meanwhile, government officials will examine a regulatory framework for digital channels, but the policy framework is expected to take at least a year to develop. The government has made it clear that it will now shift TVNZ’s focus from a commercial to a cultural role.

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