TVNZ chief executive Jodi O’Donnell. Photo / Dean Purcell
TVNZ chief executive Jodi O’Donnell. Photo / Dean Purcell
TVNZ is expecting a financial loss of up to $33 million this financial year - more than double what it originally expected - with a “significant” impairment to also hit the state broadcaster.
It announced today it expected underlying operational losses of between $28m and $33m this financial year, whichruns until June 30, following “challenging marketing conditions” in the second half.
TVNZ had been originally forecasting a $15.6m loss this financial year. But it was already behind the eight ball when it posted its half-year results to December 31 - a $4.6m operational loss for the six months, with a $12.2m impairment.
In addition to the underlying operational losses, TVNZ’s full-year result would include a significant impairment “acknowledging the impact TVNZ’s forecasted future earnings will have on its asset valuation”, the broadcaster said in a statement today.
TVNZ highlighted weak demand in traditional television advertising, which was down 15.8 per cent year-on-year “and is only partially offset by TVNZ’s digital revenue, despite streaming audience and revenue growth on TVNZ+”.
“We have made significant strides in our path to being a digital-first broadcaster over the past six months, however, as a fully commercially funded organisation, we are exposed to the ad market,” said TVNZ chief executive Jodi O’Donnell.
TVNZ chief executive Jodi O’Donnell in the heart of the 1 News newsroom. Photo / Dean Purcell
“Since we announced our interim position, the advertising downturn driven by recessionary conditions and structural market change has deepened. TVNZ’s revenue position as a result has deteriorated, despite a continued focus on cost-saving initiatives.
“While we strongly support regulatory and legislative change to encourage a fairer playing field and fit-for-purpose operating environment, we are not seeking financial support from the Crown. Our balance sheet is robust and can support this loss and our transformation.”
The broadcaster suffered a heavy blow in the Employment Court last week, when Chief Judge Christina Inglis upheld an earlier Employment Relations Authority decision that TVNZ had breached its collective contract in failing to adequately work with journalists on cost-saving proposals and plans.
This included the proposal to cut popular and profitable shows such as Fair Go and Sunday.
The final episode of Fair Go aired on TV1 last month. Photo / TVNZ+
The court case has exposed the broadcaster to heavy costs - aside from the legal costs, it has had to retain 17 journalists and broadcasters while the issue is sorted out. The E tū union also predicts other staff, who have already left, may launch personal grievances.
It also means TVNZ will have to weave a careful path as it undertakes future cost-cutting.
In its statement today, TVNZ said it had accelerated its transformation programme to bring efficiency benefits online faster “and will continue to realign its cost base with its revenue and a digital-first focus”.
“These [financial] results won’t be a barrier to our strategy – they only show the need to move faster. We will continue to invest aggressively in a digital future to build online audience and revenue scale, and to secure a profitable and sustainable future for the business.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
