Friday, April 07, 2006

Editorial: TVNZ job harder this time round

Rick Ellis' return to the chief executive's desk at Television New Zealand is a slap in the face for the Government. Not that you would gather as much from the comments accompanying his return. According to Broadcasting Minister Steve Maharey, the TVNZ board had chosen well in appointing "a good safe pair of hands". How different things were when Mr Ellis left the state broadcaster in circumstances that now have become even more of an embarrassment for the Government.

At that time, his considerable successes, including making TV One profitable for the first time, boosting viewer loyalty to TV2, increasing television's share of the advertising market and reversing a ratings decline, counted for little in the Beehive. Its sole focus remained TVNZ's hiring and then sacking of John Hawkesby, and an arbitrator's subsequent $5.3 million finding in favour of the newsreader. Seemingly, it was irrelevant that Mr Ellis had just taken the reins when Hawkesby's $750,000-a-year contract was signed off in 1998.

The Prime Minister described the episode as catastrophic, and declared herself "so mad" that the money was not available for local content and better-quality news and current affairs. The culture at TVNZ was one of extravagance, she said. What followed, driven by the Government, was a concerted effort to cut the pay of TVNZ presenters. With the board and management effectively sidelined, those presenters became, in effect, the fall-guys for the Hawkesby debacle. Mr Ellis, himself, was quizzed by the then Broadcasting Minister's staff on his employment contract and the cost of ending it early. It was hardly a surprise that he left when that contract expired in 2002.

His reappointment only emphasises the folly of the Government's approach. Rather than harass the management and board, it should have reflected on the fact that the commercial model which underpinned such contracts was engineered by successive Governments. And that, no matter how much it disapproved of the grossly inflated salaries of presenters, or to what degree many of its supporters were stricken by envy, this was not an area in which it should be involved. TVNZ, far more than it, knew the worth of the people who provided its human face, and their importance to its ratings and profitability.

The repercussions of the interference have merely confirmed the lack of judgment. Over the past few years, falling confidence inside TVNZ has been matched only by a slump in popular esteem. Finally, the assault on the "culture of extravagance" culminated, somewhat bizarrely, in the resignation last year of the previous chief executive, Ian Fraser, after he was instructed by the board to involve himself in key contract negotiations.

New chairman Sir John Anderson and the TVNZ board have chosen Mr Fraser's successor for the right reasons. Mr Ellis' previous tenure and experience as a manager of corporate operations suggests he has the wherewithal to stabilise the company, restore confidence, respond to TV3's challenge and lead TVNZ into digital broadcasting. The job this time is tougher, however, because of the public broadcasting charter introduced in the wake of his departure.

But it should help that by now the Government must surely have learned a lesson. Its interference succeeded only in cultivating a dysfunctional culture and significantly eroding shareholder value. The broadcaster's board intimated as much with the barb that is implicit in this appointment. TVNZ once had a winning formula. Mr Ellis' task is to rediscover it. The Government can help by butting out.

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