Embattled broadcaster MediaWorks booked millions in losses from its involvement in the V8 Supercars series.

Financial accounts for the year to August 31, 2011 for MediaWorks' parent company, GR Media Holdings, show a provision for "one onerous programming contract that the directors and management forecast will be loss-making".

BusinessDay understands the "onerous contract" was for the broadcast rights to the V8 Supercars series, struck by MediaWorks TV3 in early 2007 and used to brand the channel the "home of motorsport".

The net loss of the V8 deal is consolidated in the accounts with costs from the switchover from analogue and digital broadcasting as part of a $17.7m liability provision, but BusinessDay sources said the car-racing deal accounted for at least $5m of this figure.

TV3 acquired the V8 broadcast rights shortly before MediaWorks was bought by Australian private equity firm Ironbridge Capital. Then-race series chairman Tony Cochrane said at the time: "TV3 came in with an outstanding bid and proposal to take the sport further than it has ever been in New Zealand which was simply too good to refuse."

The timing of the motor racing series, in the early evening on Sundays, led to TV3 initially interrupting coverage to screen the 6pm news, then later transferring the live broadcast at 6pm to partner channel C4, and - following a rebranding of the channel to Four - screening the second half of the race late on Sunday evening.

This disjointed coverage led to criticism from race fans and TV3 acknowledged poor ratings for the motorfest were responsible for its increasing marginalisation of the event.

High production costs for providing live broadcasts from the New Zealand leg of the series were also blamed by BusinessDay sources for the V8 contract becoming a burden.

MediaWorks is not the only entity left ruing its involvement in the Holden versus Ford motorfest.

Hamilton's hosting of the race left the local council with losses totalling $37 million before the rights were sold at a steep discount to Auckland Council earlier this year.

TV3's rights to the V8 series have now lapsed and it is understood race organisers are pinning their hopes on selling them to Sky.

The crystalisation of losses from the V8s came as Ironbridge grappled with a takeover bid from a rival private equity firm and tries to convince bankers owed $388m to accept a restructuring proposal that will see significant writedowns on amounts owed.

In preparation for the restructure, MediaWorks booked a $242m goodwill impairment in its accounts, a writedown largely responsible for a bottom-line $306m loss for the period.

- © Fairfax NZ News