Tuesday, November 08, 2005

Why Did TVNZ Let Susan Wood's Case Get So Far

Because they wanted to embarrass Clark. It was their only option.

The Board and Management of TVNZ were left in an invidious position by Helen Clark when she viciously rounded on them in the aftermath of the Holmes departure and the Bailey $800,000 mother of the nation payment. David Farrar captures the issues well here.

The Government, toadying up to their CTU mates in 2000 over-rode Court of Appeal judgments (and more on the foolish lines Labour treads when it overrides the Court of Appeal later) and through new legislation made it very difficult for employees to have fixed term contracts. Remember this was payback to the Unions for helping Clark get elected.

Meanwhile TVNZ is castigated by Clark for its "culture of excess" and the Board is monstered into agreeing to cut down the "Star Culture" and with it the salaries of the celebrity newsreading talent.

The Board knew it cannot be done - the commercial imperative at TVNZ requires Stars and the costs that go with them. Rock and a hard place. Rightly or wrongly they make judgements as to what is the price to pay their talent. Generally I think they got it wrong, very wrong. But that's commercial life.

However, fast-forward to now. How to get out from under the catch-22 with Clark? I know, create a situation that is "resolved" by the Courts.

This is what the Board set out to do. Why else would they entertain the Wood saga going to the (very) public Employment Authority?

However they did not bank on Fraser chucking his toys out of the cot and the saga's in their entirety being played out at a 'slow news' time. Plus the shining vulgarity of Wood's evidence to the rank and file of talk-back land ensured this would make very good copy.

As David Farrar rightly points out, this issue (and TVNZ generally) can be sheeted home to Clark and Cullen. They have single handedly destroyed billions of value in shareholder wealth with the way they have dealt with TVNZ. Whether you wanted to sell it 0or not the property is now unsaleable. I look forward to the writedowns in Cullen's next budget (ha ha!)

Readers of this bliog will recall I posted similarly on Air New Zealand and how Clark and Cullen's ideology destroyed wealth similarly when their zenophobia denied Air New Zealand the chance to sell a significant minority stake in the airline to Singapore Airlines - all on zenophobic grounds. 18 Months later taxpayers bailed it out to the tune of $885Million - that investment is now underwater.

TVNZ is now in its death throes - no balance sheet to speak of, talent contests going awry, declining audience share in its key markets, a shareholder sucking it dry of surplus funds and the same shareholder demanding it produce unwatchable drivel for niche audiences - using taxpayer provided grants.

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