Fox loss challenge for Mediaworks programmers

Mediaworks new chairman Rod McGeoch. Photo / Michael Craig

The future of MediaWorks' channel Four as a light entertainment back-up to TV3 now represents the biggest challenge to the company.

The company moves out of receivership tomorrow and into a new era where it is owned by seven of its out-of-pocket former bankers.

They believe that stripped of debt MediaWorks can be a strong earner.

But TV3 is about programming and getting bums on seats - selling them to advertisers, and overnight MediaWorks has lost 25 per cent of the Four schedule and access to some of the best shows on TV3.

From tomorrow it has to stop screening popular shows such as Homeland, New Girl, Bones and Modern Family from tomorrow after losing its deal with the Fox broadcasting network.

It's a dramatic start to a new era at MediaWorks, and one that put pressure on the company to locate new safe-bet shows.

Bankers have taken a bath on more than $500 million of debt - replacing it with equity and expecting the company to work as a going concern, but a loss of access to key programming from Fox studios means the new firm will be starting off with a handicap.

New chairman Rob McGeoch is right that big output deals like those for Fox are no longer fashionable.

But the deals provided security at a time when TVNZ and Sky have both been competing for shows - and Fox has been talking to both about passing shows to them.

According to MediaWorks, the company has chosen to not pursue the Fox deal that was made null and void when the company went into receivership.

But the loss of high profile - though not necessarily huge rating shows like Homeland and Modern Family - is a blow to the stability of the schedule that attracts advertisers.

The loss of the deal has even greater impact on Four - MediaWorks second channel - which is built on Fox shows like the Simpsons.

MediaWorks may well be trying to secure individual Fox shows on a one off basis - but that is likely to be more expensive than it has been under an output deal.

McGeoch said MediaWorks was working on a new arrangement with Fox.

He said full output agreements were "outdated" in the modern television market. MediaWorks is right that big expensive output deals like the one with Fox are expensive and restrictive.

But occurring at it does now - in the run-up to the pre-Christmas advertising run- the company is starting on the back foot.

The company will still be able to screen selected CBS shows such as CSI, NCIS and the Top Model franchises, along with content from NBC Universal and Sony Television.

MediaWorks TV Chief Executive Paul Maher said the move freed up cash to invest in local programming.

"So while there will be some scheduling changes in the short term, we have a much stronger financial position from which to aggressively target the programmes our viewers want," McGeoch says.