TVNZ reported revenue of $180.3 million in the six months to December 2022, but forecasts a loss of $15.6 million in the 2023/24 financial year.Photo/Provided
Written by Colin Peacock RNZ
TVNZ plans to significantly reduce content production, programming and operating costs in response to commercial client advertising cuts. Future projects are being considered, and the state broadcaster has cut off pay increases for executives and high-income staff.
Staff were informed of the changes this morning by acting chief executive Brent McAnulty in a memo and video address.
The memo said senior executives had identified “all possible cost reduction opportunities” in recent weeks.
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“Content budgets have been reduced for both local production and international content. A compensation review for our executive team and other highest-paid employees has been suspended.”
Mr McAnulty told staff: “We’ve had some very demanding demands here, but we need to live within our means.”
“All projects are being reviewed to determine whether they should continue, be paused, or canceled in the current fiscal year,” the memo states.
TVNZ is currently bidding for a major overhaul of its digital technology and internet infrastructure.
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“We are also strengthening our control over capital expenditures and are considering how we can reduce labor costs for temporary workers and contractors,” the memo said.
“The TV advertising market is currently in a challenging environment, and as the largest player we are being affected,” McAnulty told staff in a memo this morning.
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“Local businesses are reducing advertising spending due to economic conditions and uncertainty leading up to the election,” the report said.
The memo urges staff to use their vacation time this year.
Recruitment for vacant roles will be “paused until 2024” and TVNZ will “elect not to fill other vacant roles” and postpone start dates for some roles.
TVNZ has over 750 staff. More than 300 of them earn more than $100,000 annually.
The $350 annual allowance that was given to all employees as essentially a COVID-19 relief package will not be paid this year.
TVNZ has “paused” all travel in 2024, except for “business-critical travel related to reporting, commercial clients or content negotiations”.
According to the memo, TVNZ will also reduce spending on social media, online marketing, promotions and market research.
“While we are suspending all company events, we anticipate that Christmas celebrations will be held in our three main offices,” the memo states.
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TVNZ reported revenue of $180.3 million in the six months to December 2022, but forecasts a loss of $15.6 million in the 2023/24 financial year.
The state broadcaster has previously suggested it may have to deal with financial difficulties in the near future.
TVNZ’s latest letter of intent (PDF) says revenue and cost alignment is under “increasing pressure”.
“We will take a dynamic approach to investing to maintain our core television business and allocating resources to accelerate the growth of our online business in the future. The better we perform, the more aggressively we can invest in shaping our future,” the document states.
In a memo today, Brent McAnulty assured TVNZ staff that TVNZ still maintains a high share of TV viewership and revenue, and that online platform TVNZ+ is on an “impressive growth trajectory”.
Former CEO Kevin Kenrick persuaded the government in 2019 to allow TVNZ to effectively waive its royal dividend so it could invest in programming and digital services.
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This angered rivals in commercial media that could not count on such a backstop, while also competing for viewers and revenue with foreign-owned streaming services and other broadcasters.
TVNZ has invested heavily in TVNZ+ and recently launched live sport on the platform after securing the rights held by Spark Sport until it was suspended in July.