TVNZ to pay $2000 bonuses to staff after bumper $59m profit

Tuesday, 31 August 2021

TVNZ won’t draw down $30m of funding negotiated with the Government last year and will instead pay a $15m annual dividend.

Television New Zealand will pay $2000 bonuses to its 500 or so permanent employees who don’t already get incentives after posting a $59 million annual profit that it hadn’t expected before Covid struck.

Its remaining 200 management and permanent sales staff are already rewarded for performance through separate incentives.

The state-owned broadcaster has cancelled plans to draw down on $30m of funding it negotiated with the Government last year and will instead pay the Crown a $15m dividend – its first since it suspended paying dividends for what it described as “the foreseeable future” in 2018.

The largesse reflects a dramatic turnaround in TVNZ’s financial performance for the year to the end of June, after a $26m loss the previous year that prompted it to cut dozens of jobs.

* TVNZ says Government has agreed to chip-in another $30m 'if needed' after it posts $26m loss

* TVNZ to cut between 70 and 90 jobs to protect 'financial sustainability'

The turnaround reflected a recovery in its advertising revenues after the Covid lockdowns in the first half of last year and an even steeper drop in costs as the availability of new entertainment dried up for all broadcasters because of ongoing restrictions.

As of June 2020, 250 TVNZ employees – more than a third of its workforce – were on salaries above $100,000.

TVNZ posted the result amid continuing speculation over whether Broadcasting Minister Kris Faafoi has the public and political support to see through a plan to combine TVNZ and RNZ into a new public media agency, with Cabinet expected to consider that idea later this year.

TVNZ had an usual year due to Covid, but chief executive Kevin Kenrick says it’s more confident it can manage the shift from broadcast to digital.

TVNZ chief executive Kevin Kenrick suggested there was no reason to think TVNZ’s turnaround would have an impact on that proposal.

“My understanding of the public media initiative is it is less about the financial performance and more about the sustainability of local journalism and servicing underserved audience,” he said.

The stronger TVNZ’s financial performance was, the better quality contribution it could make to whatever that future entity might look like, he said.

“The last financial year has been quite remarkable for TVNZ,” Kenrick said.

“The scale of audiences combined with strong demand for video advertising has enabled the business to recover from the prior year’s financial challenges much faster than forecast.”

Total advertising revenues rose $36m to $322m, while expenses fell $67m to $253m, thanks mainly to a 30 per cent drop in content costs as productions of shows overseas were delayed.

TVNZ said digital revenues rose 44 per cent giving it “confidence that the migration from broadcast viewing to digital streaming can be achieved in a financially sustainable way”.

Kenrick singled out Black Hands, Origins, National Treasures and Popstars among its current affairs and entertainment highlights.

Nearly 2.7 million people watched its broadcast coverage of the America’s Cup races, which also ratcheted up 2.4 million live streams.

TVNZ would be upgrading the capacity and capability of its digital infrastructure over the next three years, Kenrick said.

Kenrick said his own total remuneration, which was $1.6m in the year to June 2020, will have dropped in the year just past due to the company’s decision to suspend short-term incentives to him because of the pandemic.

“Obviously my income will have gone down year-on-year because of that.”

More details would be released when the company releases its annual report next month.

Kenrick said the impact of the current Covid restrictions on advertising had been mixed.

Sales were softer as a result of the lockdown, but the impact was less than last year, he said.

“We are seeing businesses are better set up to continue operating through various levels of lockdown.

“There are definitely some industry sectors that are just unable to operate so not surprisingly we are seeing reductions in advertising bookings for those sectors, but we have seen others that have increased their advertising.

“Overall it is softer but it is nothing like what we saw 12 months ago.”