KEY POINTS:
Eight months ago I left TVNZ as Head of News and Current Affairs and ever since I've tried to keep my head down, mouth shut and breathe through my nose when it comes to what's going on at the state broadcaster.
However, now I'm starting a political column in this paper I thought I needed to clear the air. Everything about TVNZ is political, so it's a relevant subject to kick off on.
I spent nearly four years there and, yes, I made some dreadful mistakes. Apart, perhaps, from Helen Clark, we all must concede occasionally we make mistakes.
Probably the worst error I made was accepting the job in the first place because the fundamentally flawed nature of the company makes it almost impossible for anyone to succeed in a TVNZ management role.
My sympathies go to my successor, Australian Anthony Flannery. Although the lucky bugger has taken off to the World Cup for the next five weeks. Still, maybe that's not a blessing. God knows what catastrophes may occur while he is away.
Now, I know you all want to know the inside gossip on Judy Bailey, Paul Holmes and Susan Wood and I'll get to that, but first you must endure a short lesson on why the place has a tendency to implode and why it keeps lurching into a tailspin: TVNZ attracts trouble like a magnet. We hold it much more accountable than any other business in the country because it's state owned. We all feel we have some share in it and, besides, many of the folk working there are regular visitors to our living rooms every night.
Those visitors are often a potentially incendiary mix of talented creatives and performers, with all the attendant traits of ego, insecurity and over-confidence. The bottom line is they are prone to hissy fits.
TVNZ can and does become a political football as puffed-up politicians use it to boost their own profile by grandstanding on its every mistake and attempting to embarrass the Government as a result. They're also intent on settling their own scores with the news division for its coverage of their mistakes and try to cow the state broadcaster into doing weaker coverage of their own abysmal performance.
Rival media organisations give TVNZ's blunders maximum coverage because they think the public are fascinated by the lives of the telly rich and famous. Those rival media organisations are, of course, TVNZ's competitors.
TVNZ is a Croc. I am not being rude here, that's what you call a Crown Owned Company. This means it has a shareholder that is schizophrenic. As a shareholder, the Government wants a 9 per cent return on capital invested but it also wants, through the charter, a non-commercial social dividend. The Government wants to have its cake and eat it too and that just doesn't work.
Making a 9 per cent dividend is tough enough in the media market today but when the charter requires you to spend precious revenue on programmes that will never make a buck, it's plain suicide, because it creates a backwash of financial pressure that undercuts the whole business.
Most of all, the Government wants to cover its political butt, which means it, too, attacks TVNZ when it cops flak because of yet another cock-up on Hobson Street.
TVNZ has a politically appointed board. I believe that means in the past the board was often more interested in sucking up to its political masters than running a business. Board members also turn over at an incredibly high rate, compared with the private sector. Those short-serving board members usually have little or no knowledge of the broadcasting business and, indeed, because they're politically appointed sometimes have little knowledge of business itself.
In short, TVNZ is dysfunctional because it's designed that way. Its management often talks about the TV One or TV2 "family". If TVNZ was a family, CYF would have been called in long ago.
You cannot run TVNZ as a purely commercial business because lunatic political considerations constantly intrude.
Take, for example, Helen Clark's aversion to paying presenters large salaries. Her stand has cost the company tens of millions of dollars and has been a major factor in bringing the place almost to its knees.
It dates back to the John Hawkesby debacle when the then Opposition leader Helen Clark sounded off against TVNZ's "culture of extravagance". It was purely a political stand designed to embarrass the Government of the day but once she became Prime Minister it locked her into defending her position against big salaries.
From there flowed a series of disasters involving Judy, Paul and Susan.
When I came into the job, TV One and its news was suffering a decline in audience. We decided we needed to freshen it up a bit and made changes. Some presenters, such as Richard Long and April Ieremia, were let go when their contracts expired, Jim Hickey took himself off to make documentaries and we tried to rev up the content with more breaking news. For 18 months the strategy worked and ratings firmed up well. Then it all turned to custard.
Bearing in mind Helen Clark's stand against big payouts the board was keen to "limit its exposure" to such damage and it was made clear to me we should put the highest-paid people on short-term contracts so if we had to get rid of them the company would not have to fork out millions.
That was the big sticking point with Paul Holmes. A one-year contract is a little like a one-way ticket to Baghdad. It got him worried. I believe it tipped the balance for Paul who, under intense flattery and many subsequently unfulfilled promises from the then Australian managers of Prime, quit TVNZ and went to Prime.
That opened up the market for TV3 to launch Campbell Live and take a chunk of the current affairs audience at 7pm, costing TVNZ big bucks.
Worse, it was the cue for Judy Bailey to make her move. As her contract renewal came close she made a strong case to more than double her salary. Perhaps she, too, was suffering the insecurity of a one-year contract. Perhaps she felt the winds of change might soon claim her too. Certainly, she knew her bargaining position had improved with Holmes' departure because TVNZ would not want to lose two high-profile presenters in one year.
She was right. My personal feeling was Judy was crucial to the success of One News. We might look to replace her in three to five years but, by that time, she would probably have wanted to retire. We'd have time to get effective succession plans in order and bring new presenters through.
We put together a business case showing if we lost Judy, the impact on ratings would be significant and we'd lose many millions of dollars in advertising revenue as our audience decreased. In comparison with the potential losses, her salary increase was insignificant. Rightly or wrongly, it was a straight commercial business decision. The outlay is worth it when balanced against the return and the potential cost of not doing it.
The board accepted the business case and approved the salary contract. I passed a signed copy to Judy. But then one board member dissented, threatened to resign and went to the minister.
The board panicked and instructed Ian Fraser and myself to kill the contract, physically retrieve it from Judy and hand her another contract for a lot less cash.
I always believe a deal is a deal and both Ian and I refused to do it. Besides, as our lawyers warned, the potential for damages was Hawkesbyish in size.
The board backed down and the effluent hit the fan. Helen Clark and Minister Steve Maharey went into hysterics over it and publicly flogged the board.
Judy, for the first time in her career, suffered huge public abuse and One News ratings began a nose-dive from which it never recovered.
Cue Susan Wood. The year before the board had approved her salary of $450,000. Now, after the Bailey debacle, I was told the board wanted to cut Susan's salary by $100,000, presumably to reduce the risk of another beating from Helen.
Now, I've never seen people react well to a 22 per cent pay cut and Susan was no exception. She immediately engaged lawyer Mei Chen who went at TVNZ like a rabid chihuahua and within weeks the row went public and the effluent was again flying around the building.
This fiasco damaged poor Susan's reputation, hit Close Up's audience and, I think, was a big part in her sad decision to quit a year later, exhausted and discouraged.
In all three cases, I could have handled the situation a hell of lot better but the infuriating thing is all those costly disasters came from a purely political butt-covering exercise, rather than any serious commercial decisions.
Why am I raking up the past? Because I see the same thing happening again. The Government is keen on Freeview and consequently TVNZ is sinking huge bucks into digital TV with little hope of ever getting much of a financial return. To do this it's getting deeper and deeper into debt with the Government, becoming far too reliant on government cash, rather than its advertising revenue. This means it's now much less independent and has to be more responsive to what the politicians want.
It's also cutting costs to try to fund the expensive digital strategy. This has led to big job losses and rock-bottom morale, propelling many surviving staff into the more tranquil waters of TV3 because they don't want to stay with TVNZ anymore.
There has been a big management cleanout in the past 18 months. Can the new bosses cope better than the old ones? I doubt it.
Several of TVNZ's top managers have recently returned to the company, having left it in back the 1990s. Sometimes it looks as if they're trying to recreate the TVNZ they knew 10 years ago. If so, they're making a big mistake. Sky, TV3 and Prime have changed the market dramatically since that golden era.
Weatherman Brendan Horan gets the boot for some unknown reason. Expect to see Jim Hickey back soon. Holmes returns for a chat show. Will these blasts from the past make any difference? I don't think so.
Worse, I don't think that the management bloodletting is over. The new board chairman, Sir John Anderson, is a wily chap. He will have set Rick Ellis and his top managers some serious financial and performance targets to reach. I see no sign of TVNZ being able to arrest its decline and the chances are over the next 18 months, especially if there is a change of Government, heads will roll.
That means another new management regime, more change, more instability.
The only real hope is for some kind of non-partisan agreement by the politicians on making TVNZ completely independent of government and they need to decide what they want the network to be: A public broadcaster or simply another commercial channel? It cannot do both. That much is clear from the calamities of the past seven years.
