Rupert Murdoch to buy TV3?
Sky may bag broke TV3
A potential buy-out of our struggling network, which is grappling with a $560m debt, would give Rupert Murdoch's News Corp a powerful stake in NZ media.
Pay TV network Sky has emerged as a contender to buy cash-strapped rival TV3, as the Australian owners look for a way out of the channel's crippling $560 million debt.
TV3 is part of the MediaWorks group, which also includes Channel Four and radio stations including The Rock and Radio Live.
MediaWorks' Australian owner Ironbridge is paying $1 million a week in interest on its loans - and the banks are "watching like hawks" for Ironbridge to default.
A sale to Sky has been discussed at senior levels within MediaWorks but might have to be rubber-stamped by monopolies watchdog the Commerce Commission.
Such a sale would mean Rupert Murdoch's News Corp, which owns more than 40 per cent of Sky, would gain a powerful stake in New Zealand media.
Other potential buyers are said to be waiting for a firesale when the banks step in. These include Australian media companies Channel 9 and Seven Network.
A source said Ironbridge wanted to sell before strict new debt-repayment requirements come into force in November.
So here is me joking that Murdoch would buy TVNZ when the Government look to flog it off if they win the election in November when in reality it was always Mediaworks that had the financial problems.
When Ironbridge bought Mediaworks, it was in the tail end of the credit bubble and the rates of interest they used to buy the deal left Mediaworks with a mountain of debt to shovel. This mountain was so large, Brent Impey the CEO of Mediaworks had a private chat with John Key at the Telethon and had him reverse Ministry advice and loan Mediaworks $43 million in a deal they could not have gained on the open market under the guise of paying Mediaworks radio fees. Radio is where Mediaworks makes the majority of its easy cash, the production required to do a radio advert by a bored script writer churning out the same dross day in, day out (it's like working for the NZ Herald minus editorial oversight from the National Party) is far less than the costs of producing a TV advert. The loan Mediaworks scored most likely was used to free up its purse strings to afford Paul Henry (who is rumoured to be getting paid $500 000).
Now the debt mountain is just too high for Ironbridge to live with once new debt-repayment requirements are brought into effect by November, it's off to Rupert to buy TV3.
Do we still get our $43 million back btw?
The question we as NZers need to ask while the phone hacking scandal plays out, is do we want a company as clearly corrupt in ethical practise as Rupert's owning one of our largest media outlets?
Should Sky get that kind of control over the NZ media industry? And most pointedly, do we really want Rupert having that kind of unchallenged role in our media?
Could we expect Campbell Live to be replaced by Paul Henry Dead?
The Government must consider another buyer surely? Rupert is as popular as lung cancer.