Wednesday, March 9, 2011

Media works bailout beat up.

Plenty of chatter on the left end today about media works getting a "loan" from the government to pay for their frequency licenses.
The alternative of course is a spectrum devoid of almost every station other than covers (concert)fm and radio left wing. Whilst that might make vicars, spinsters and 12 wellington lefties happy it would not please the rest of the country.
They are paying an eye watering interest rate for a fee that is based on something that has a government mandated artificial value.
The upshot of course is that the left team can continue to enjoy John Campbell, because if the radio arm of that business folds the telly arm will not be far behind it.
And then we will be left with shortland street and news shows that consist almost entirely of studio based pseudo journalists interviewing junior pseudo journos in front of random buildings all over the country.

It should be noted that the government are charging 11.2% interest on this..

A neat solution to what is a very dificult environment for media companies at the moment and especially the television arm of that company that is basically competing with a massively subsidised publically owned company.


Robert Winter said...

So the bail-out is a social intervention, also designed to maintain pluralism in in the broadcasting world. That beats Mr Farrar's explanation for a mate's rate deal to bail out a failing company. Is this the new government policy? Failing companies need only turn up and a deal will be done? Sounds like a Muldoonian and Keynesian "neat solution".

Barnsley Bill said...

Robert, frame it in whatever way you need to but the reality is that Media Works is in trouble. They have not been bailed out. It is a loan with a nice fat rate of interest.
This government has proven to be pragmatic and not trapped in dogma.
Unique economic circumstances require unique actions.
Based on the last lot we would probably have seen Cullen buying the business at a ridiculous multiple of real value in much the same way he did with the railways enriching (beyond their wildest dreams) foreign shareholders and saddling us with a wealth eating lemon.

Redbaiter said...

Its none of these things. Even though the licenses are purchased in 20 year blocks, the fee can be paid in yearly increments. That is the deal. As long as each year the fee is paid so what? It only becomes a problem if payments fall behind.

Trying to claim the fee payments as a loan is some kind of accounting trick allied to taxation rebates.

There's no smoke and there's no fire. This is all just a ridiculous beat up.

fugley said...
This comment has been removed by the author.
leftrightout said...

It is a loan with a nice fat rate of interest.

Fine, but why don't they get the loan from a bank? Or do a capital raising from their shareholders? Why is the government acting as a bank?

Shane said...

The Radio Broadcasters Association negotiated with the fovt to allow all radio broadcasters to spread the lease payments over a longer term. Despite the Herald's attempts to frame it as a case of favourtism, this was not a special deal done just for Mediaworks.

Redbaiter said...

"Why is the government acting as a bank?"

Unethical for the government that sells the frequencies to be also lending the money to buy them, but in all likelihood it was a scheme dreamed up under the Klark administration.

Barnsley Bill said...

Why is vendor finance unethical?

Redbaiter said...

Thanks for that confirmation of idiocy. Trying to explain ethics to you Barnsely would be like trying to teach typing to a man with no hands.

How come all you mincing Progressive fuckwits cannot ever see the many distinctions that naturally apply between private and government in commercial transactions? You're just fucking hopeless, especially if you really do need the problems pointed out to you in this case.

Adolf Fiinkensein said...

Red, why don't you go home and have a little kip?

This is no different from a company choosing to lease a vehicle instead of paying cash. If the company was all cashed up it likely would pay cash. Instead, it has entered into a lease arrangement whereby the payments are amortised over twenty years with an effective interest rate of 11.2%.

A pretty good deal for the taxpayer, I'd say and some pretty piss poor reporting from the piss poor Herald.

Redbaiter said...

"This is no different from a company choosing to lease a vehicle instead of paying cash."

Except the company doesn't make the rules and regulations, run the legal system, conduct fraud investigations, enact legislation, have access to inside information, require reports from other commercial entities ETC ETC ETC. The inference that there is no difference when a government behaves as a private company as to when private shareholders form a company is just absolute irrational nonsense and nobody with their fucking head screwed on would suggest it. And its made even worse in this case by means of the fact that the same fucking government owns radio and TV stations. Would you approve of referees betting on football matches they were umpiring?? FFS..!!

WAKE UP said...

NOBODY has addressed the question of WHY Mediaworks is "failing".

Anonymous said...

"...especially the television arm of that company that is basically competing with a massively subsidised publically owned company."

How is the government massively subsidising TVNZ? Through NZOnAir? Get real

Robert Winter said...

It gets better and better.

"This government has proven to be pragmatic and not trapped in dogma.
Unique economic circumstances require unique actions."

I see myriad "unique circumstances" queuing up to take advantage of this flexible and undogmatic government. Why does this company , in this sector, deserve a special deal? it's a reasonable question as many companies would like to know why and how, too.

Redbaiter said...

"NOBODY has addressed the question of WHY Mediaworks is "failing"."

Two words-

John Campbell.

Anonymous said...

I noticed extreme leftwing hatespeecher Bomber Bradbury is livid about the bailout. Probably pissed because ALT-TV didn't get the same when it went into liquidation due to his managerial incompetence.

boo hoo

Anonymous said...

Even though I'm not a TV watcher I dread to think how bleak it would be if Shortland St was it. I'd pay, and plenty, to avoid that catastrophe being inflicted on civilisation.

Adolf Fiinkensein said...

Correction - amortised over five years, not twenty.

Anonymous said...

the govt stole the airwaves intellectual rights in the first place, so what is immoral is that they continue to have the audacity to restrict speech by charging for something they never had a legitimate claim to. Did the GOvt invent the technology to utilise the airwaves?
Clearly the answer is NO. The govt very rarely invents anything worthwhile.

Anonymous said...

#anonymous 8:28am
Did the Govt invent the internal combustion engine? then why traffic lights and road rules? this is a closer analogy since this is about is about radio interference, not content.

Anonymous said...

Redbaiter can be a trifle brusque at times, but he's smack in the middle, dead-right on this issue.