Job cuts possible at TVNZ

Jobs may be on the line at TVNZ as the state-owned broadcaster looks for ways to cut $25 million worth of costs in the wake of a drop in advertising revenue.

Staff were briefed this morning on a plan to cut costs, and while there is no figure for job losses yet, they are expected to eventuate from such a large cost saving target.

Fifty senior managers have been asked to come up with ways of saving money.

The cost cutting plan is a result of a collapse in the advertising market since Christmas.

TVNZ said advertising revenues are 10 percent below budget, which represents an annualised shortfall of income of $30m.

The half-year result due at the end of this month will be "pleasing" but reflective of trading to December 31.

The broadcaster did not comment on whether its dividend to the Crown would be reduced.

In the year to June 30, 2008 the broadcaster paid the Crown a dividend of $10.3m after reporting an after-tax profit of $19.4m.

Excluding government funding for the digital channels, total income for the year to June 30, 2008 was $379.7m, an increase 1.3 percent on last year.

The primary driver of this increase was a $2.7m increase in advertising revenue.

Excluding costs for the digital channels which are covered by government funding, total expenses were $352.6m.

Other media companies were expected to report a drop in advertising revenue this reporting season. Fairfax and APN both report next week.

Sky Network Television today reported its profit dropped 16.7 percent in the six months to the end of December.

This was mainly a result of investment in the new High Definition (HD) platform and the impact of the recession on its free-to-air Prime channel's advertising revenue – which decreased 11.9 percent to $12.6m.

- NZPA