Labour leader Chris Hipkins stands by his decision to scrap the media merger after TVNZ's financial woes deepen.
TVNZ announced on Tuesday it expected an underlying loss of between $28 million and $33 million in the 2024 financial year. In comparison, Warner Bros. Discovery's New Zealand operation, which is shutting down Newshub, reported a post-tax loss of $35 million in 2022 and $21 million in 2021.
In its half-year results announced in March, TVNZ reported a bottom-line loss of $16.8 million, and an underlying loss of $4.6 million. After the losses, TVNZ announced it would cut 68 jobs including its Sunday and Fair Go programmes.
Last year, when Labour was still in government, Hipkins confirmed a merger between RNZ and TVNZ would be canned.
"I was not convinced that that was the right solution, and I'm still not convinced," Hipkins told AM co-host Lloyd Burr.
"You're taking what's almost effectively a commercial entity, a for-profit entity, in the form of TVNZ and a public service broadcaster in the form of RNZ and pushing them together. Those are two quite different cultures, two quite different organisations but it does show that the problem is pretty clear."
Hipkins said there is market failure in the media sector, meaning those producing the content aren't the ones benefiting from that.
He said it is a "perfect storm" for the media sector as the country grapples with an economic downturn, and businesses stop advertising.
"That's going to be a double whammy for media companies as well," Hipkins said.
TVNZ said traditional television advertising was down nearly 16 percent from last year.
Hipkins said implementing digital bargaining will be part of the answer.
The previous Labour-led Government introduced the Fair Digital News Bargaining Bill before Parliament last year. It aims to incentivise digital platforms to do deals with news media and could penalise them if they don't bargain in good faith.
It was introduced too late to progress before last year's election.
"That's got to be dealt with as a matter of urgency," Hipkins said. "[It's] good to see the Government picking up the legislation that they actually opposed."
However, Hipkins said the country will need to look at how we shape public broadcasting in the longer term.
Watch the full interview above.
Newshub.
