TVNZ reined in after Olympics spending

Television New Zealand is to be stripped of the power to decide how it spends more than $15 million in charter funds after angering its government bosses by using the money to subsidise its Olympics coverage.

It will instead have to apply to funding agency NZ On Air programme by programme, with no guarantee it will get the full amount in any one year.

TVNZ spokeswoman Megan Richards said the company had planned to use charter money to contribute towards the "absolutely enormous" production costs of broadcasting the Beijing Olympics.

Direct Government funding had not been used in the bid for the actual rights to screen the Olympics, which was negotiated as part of a three event deal spanning the 2000, 2004 and this year's competitions. Bidding for the rights was conducted "many years ago," Ms Richards said.

TVNZ was "comfortable" with the Government's proposal requiring NZ On Air to approve funding on a per programme basis. Such a move would add "clarity" to the funding process and the state broadcaster was already discussing the proposal internally, Ms Richards said.

Broadcasting Minister Trevor Mallard told The Dominion Post yesterday that he was preparing a Cabinet paper to make the change, because he believed it was inappropriate use of charter funds - provided through the Culture and Heritage Ministry genre by genre - to subsidise the successful bid for the Olympics.

The move followed "dissatisfaction with TVNZ and a question about whether it's good value for money or a common understanding of the purpose of the charter".

The $15.1 million in direct funds was provided to compensate TVNZ for programmes that would not otherwise be screened commercially. But the organisation used it for programmes such as the Sunday current affairs show.

"If you get something in a competitive tender, especially where there is another broadcaster with a free-to-air component in their bid, then subsidising it from charter funding does not add value to the television Kiwis get," Mr Mallard said. "It might be that you can build brand on it, but that's a commercial issue from my perspective, not a charter issue."

The change would start with a one-year trial "with a no-penalty arrangement", and be implemented fully from July next year. During that period a memorandum of understanding would be struck with TVNZ on what would be approved and what would miss out. That would be programme by programme.

The new rules would not affect use of the money for this year's Olympics, or other programmes in train, or where TVNZ had made commitments. They would, however, prevent a repetition.

There was also no intention to "confiscate" money, and the same amount would be made available over a number of years. But that did not guarantee TVNZ would win the full $15.1 million in any one year. If views differed, NZ On Air had the upper hand.

Former TVNZ news boss Bill Ralston said the change would put more of NZ on Air's agenda on screens. It would, however, stop TVNZ "snaffling straight Government subsidies" for programme such as sport, current affairs and entertainment that were commercially viable.

- © Fairfax NZ News