MediaWorks takes razor to radio
MediaWorks is cutting its radio staff numbers despite being the biggest beneficiary of the Government’s media support package. But, as Mark Jennings writes, it has spared its struggling TV arm – at least for now.
Staff at MediaWorks TV must be thankful the owners are still trying to sell that part of the business. The drawn-out process has saved their jobs. Instead, MediaWorks is taking the blade to its profitable radio operation and its outdoor advertising company, QMS.
CEO Michael Anderson spoke to staff via a video link on Monday morning and broke the news that 130 “friends and colleagues” would be leaving the business. While not quite untouchable, the profitable radio business has, to a large degree, been insulated, from the constant cost cutting of the last five years.
The relative stability of MediaWorks radio, which includes The Edge, The Breeze, The Rock and More FM stations, has helped it get the better of its duopoly competitor NZME. Some of that advantage has come from the big marketing and promotional teams that MediaWorks has kept in place for its high flying music stations. These ‘promo’ teams are likely to be cut right back and could open the door for a revitalised NZME operation.
There will be a reluctance to chop the radio salesforce as MediaWorks, like all media companies, has to get every dollar in the door, but Anderson and his head of radio, Leon Wratt, will take the opportunity to exit some of the poorer performers.
The focus on cutting cost at radio is bound to produce some bitterness towards the television business. Without radio’s cashflow, Three would have disappeared 10 years ago.
Radio staff could also be asking why it has taken so long to sell the TV business and whether it should have been closed down by now.
Anderson announced that TV was on the market more than seven months ago and so far, very little has emerged on who might be looking to acquire the loss-making operation.
In the meantime, the impact of Covid-19 must’ve crushed buyer interest and crashed the price.
The rumour mill says MediaWorks has been in serious talks with Discovery, the US-listed pay TV network. It is possible that Discovery is looking to separate from Sky TV and set up its own operation here. Included in its stable of reality shows are titles like Deadliest Catch and Naked and Afraid. Sources close to MediaWorks say the potential buyer wants to retain Newshub – the news operation that spans TV, radio and online.
This could explain why the news operation has not been placed in front of the latest firing squad.
Anderson appears to have Three on ‘care and maintenance' awaiting a sale, but there are signs it could be a dangerous strategy if he doesn’t do a deal soon.
By pulling out of local productions such as Dancing with the Stars (DWTS) and The Block, the network is starting to look dangerously short of prime-time programming as the winter (TV’s peak viewing season) nears. Newsroom understands the decision to cancel DWTS cost the company close to a million dollars.
To compound the problem, MediaWorks today had to announce it had lost its recently-appointed programming boss, Ben Quinn.
Quinn is going to TVNZ where he will be general manager, business affairs in its programming department. Quinn, an experienced and widely respected programmer, took over when the previous head of programming, Andrew Szusterman, suddenly quit last year after 17 years with the broadcaster and went to South Pacific Pictures.
It will be hard now for Anderson to attract someone serious into a role that has an outlook similar to arranging the deck chairs on the Titanic.
Anderson has struggled to keep his best executives in recent years.
As well as Szusterman and Quinn, he has lost his news bosses, Hal Crawford and Richard Sutherland (to RNZ), CFO Ciara McGuigan (to TVNZ), head of communications, Charlotte McLauchlan (to RNZ), and head of radio, Wendy Palmer (now at NZME).
MediaWorks’ decision to chop 130 staff must also be raising the eyebrows of senior government ministers. The broadcaster was given a considerable handout when the Government decided to waive transmission fees paid to the state-owned enterprise Kordia for six months.
Along with the 80 percent cut in New Zealand on-air licence fees, MediaWorks would be saving at least $12 million.
On top of this it has been a major beneficiary of the wage subsidy. The broadcaster has claimed nearly $8 million for 1128 employees.
It will also benefit from the $11 million dollars in advertising that the Government is bringing forward and a yet unannounced medium-term support package.
Cutting staff from a profitable radio business to keep a loss-making TV arm intact while taking so much government support money must have Anderson wondering when he will get a ‘please explain’ phone call from Broadcasting Minister Kris Faafoi.
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