This morning, MediaWorks announced plans to sell its TV business, including THREE. Before that announcement, Tim Batt wrote about the cancellations and cuts at THREE announced earlier this week, and why you can't just blame it on TVNZ.
MediaWorks has been in deep financial poo for a very long time. It’s actually a very funny story! Unless you are a MediaWorks senior manager, shareholder, employee, or a Kiwi who likes to watch and listen to things made by other Kiwis.
In mid-2007, MediaWorks changed ownership from Canadian mega-corp CanWest to Aussie mega-corp Ironbridge, who valued the company at $608m (or 95m Big Macs). To pull that purchase off, the now Ironbridge-owned asset went from having total debt of $165m (26m Big Macs) to $769.2m (120m Big Macs). Here’s the punchline: The global financial crisis happened IMMEDIATELY after Ironbridge’s insanely overvalued take over. MediaWorks was loaded with more debt than a newly minted doctor with all the earning prospects of a newly minted PhD.
Ever since Ironbridge put all their roulette chips on the number Banana, MediaWorks has scrambled to continue existing. In 2012, American mega-corp Oaktree Capital bought most of MediaWorks in a deal that forced Ironbridge to write off over $240m (38m+ Big Macs) from the company’s value. That’s the largest drop in value seen in New Zealand media since Natalia Kills (Google it). Even that debasement wasn’t enough though - within a year, the company was in receivership anyway.
Ever since, MediaWorks has been forced to forage for coins in every couch cushion. Jono and Ben rivaled Times Square for the amount of advertising they could pack in per square foot. Then-CEO Mark Weldon bet the farm by arming Aotearoa’s biggest dickhead, Rachel Glucina (Tim Batt's honestly held opinion - Ed.), with a well-resourced online muckraking venture, Scout which thankfully died on its ass because Kiwis aren’t evil and the world isn't entirely terrible. Weldon also created a mutiny in 2015 - a company chain email urged colleagues to boycott their CEO’s wine brand because “he doesn’t support journalism”.
Just to show em, MediaWorks fired the country’s patron saint of news, John Campbell, at the height of his powers and replaced him a cheap Guy Williams-voiced reality show. They eventually gave Guy Williams an actual show, New Zealand Today, it rated through the roof and so they proceeded to kill any second season prospects, along with slashing 7 Days. (Married At First Sight went too but hey, even a broken company is right twice a decade.) Since 2010, THREE has aired more reality series than comedy series by a ratio of 2:1, coincidentally the same odds I’m paying that the company will be back in receivership by year-end.
Compounding the frustration of losing two great comedy shows is the fact that we’d already agreed to fund at least one of them. In July this year, 7 Days got $1.2m (188k Big Macs) approved in NZ On Air funding for 32 episodes. Now what? MediaWorks have the give the free money back? How did they screw up this badly? The future for the remaining local slate including Mean Mums and Golden Boy hasn’t been announced yet but the vibe in the writers' rooms must be on par with a MediaWorks shareholders AGM.
This leads us to Wednesday night’s episode of The Project and Jesse Mulligan’s sermon on the difficulty of competing with one other major free-to-air player, TVNZ. His argument is we should feel bad for THREE because TVNZ are only answerable to the Government, rather than shareholders in Canada/Australia/America/The Caymans.
Na. This is a 'Live by the sword' moment.— Tim Batt (@Tim_Batt) October 16, 2019
Mediaworks has engaged in a race-to-the-bottom with cheap reality programming for over a decade (to the detriment of NZ telly) & terrible financial management.
Now @JesseMulligan (also an RNZ employee) is sad we have a state broadcaster? pic.twitter.com/YXfA29qlxj
Truthfully, he’s not wrong. TVNZ and MediaWorks-owned THREE are in different situations. But it is really hard to feel bad for a company that has pissed away this much public goodwill. They butchered their finances and lumbered on, going all in on easy profit through cheap reality programming. And they failed. A gauntlet of reality shows didn’t work. Ownership musical chairs didn’t work. A $43m bailout loan (6.7m Big Macs) from the Government to cover its broadcasting licences in 2011 didn’t work. Underinvesting in critical digital infrastructure like an online player that actually functions didn’t work.
I’m absolutely gutted for the employees and frankly, we viewers who’ve been short-changed by the incompetence of the top brass at one of our biggest media companies but I really don’t think TVNZ was the problem. MediaWorks is, and has long been, MediaWorks's problem.