TVNZ restructure: Decisions to be broken to staff on Tuesday
Friday, 25 October 2024
Restructuring decisions, office space going up for rent, a rise in six-figure salaries and other costs it could be regretting. Simon Plumb, who has previously worked for 1News, reports on another big week ahead for TVNZ.
Staff at TVNZ will be given the first round of decisions on the latest proposed restructuring next week, as the state-owned broadcaster strives to find $30m in increased revenue or cuts.
Stuff can report TVNZ employees have been told confirmation decisions on 'stage one' of proposed changes will be delivered on Tuesday October 29, after the Labour Day long weekend.
One of the latest changes proposed by TVNZ is closing the 1News website. (The full list follows).
“After we’ve made decisions on what strategic changes to implement, we’ll propose any structural changes to support these. If we propose to make changes to individual roles, we’ll share these proposals with our people first,” a TVNZ spokesperson told Stuff in a statement.
Do you know more? Email simon.plumb@stuff.co.nz
Preparing for tenants
The upper floors of Television Centre - the formal, BBC-esque title for TVNZ’s Auckland HQ - are already being vacated and prepared for rent.
TVNZ’s attempt to score a $30m goal includes bringing tenants into once-revered office space.
“TVNZ is currently moving teams based on levels 5-7 to different space in the building to free upper levels for leasing,” a spokesperson confirmed.
“TVNZ owns its Auckland building. We are a smaller organisation than the one that moved in over two decades ago. Additionally, most of our workforce opts to work flexibly now too. We don’t have the same space requirements we once did.”
The upper levels have historically been the territory of TVNZ’s C-Suite. One former TVNZ staffer told Stuff that Level 7 was sometimes referred to as “The Stairway to Kevin”- a reference to long-time chief executive Kevin Kenrick (who banked almost $2m - including $195k in unused holiday - on his exit from TVNZ two years ago).
In contrast, the newsroom hive hums just above a basement carpark.
The most recent former CEO, Simon Power, was seemingly alert to any potential perception of hierarchy.
Power’s tenure in TVNZ’s top job was brief and bumpy. He was at the helm for just 16 months, after Kenrick quit, in a period which saw Stuff break the Kamahl Santamaria scandal and a Labour government propose (and subsequently dump) a merger of TVNZ and RNZ.
Nevertheless, Power was more widely appreciated by staff than some other TVNZ CEOs. He made a point of interacting with colleagues, including journalists, and spending time in the newsroom with staff when other CEO’s would rarely do so.
In a canny move befitting a former Cabinet Minister’s ability to read a situation and endear themselves, Power shunned Level 7 to place himself on Level 4 instead - symbolically positioning himself in the middle of the business.
Who will find themselves at the desks in the upper floors next remains to be seen. RNZ, which occupies a building one block away at the similarly grandly-named (albeit spectacularly modest inside) Radio New Zealand House, could soon become TVNZ’s tenants.
“TVNZ has had discussions with RNZ about the potential to lease part of our building. We’ve let TVNZers and RNZers know about these discussions,” the TVNZ spokeswoman said.
“We have nothing to announce though.”
More staff earning $100,000k+
According to TVNZ’s own annual reports, the number of staff earning $100,000 or more has increased 34% in four years.
But, it’s not particularly clear why that is, or, in which departments those salaries are connected to.
TVNZ’s 2020 annual report states 250 staff were on $100,000 or more, while the most recent report - published last month - shows the figure has risen to 335 staff earning $100,000 or more in 2024.
Stuff asked TVNZ why the number of staff earning six-figure salaries had gone up by 34% in four years. TVNZ’s response did not address that time frame, pointing to consistency over the last 12 months instead.
“The number of TVNZers earning over $100,000 in FY24 is consistent with the number earning above this amount in FY23,” a spokesperson said in a statement.
“TVNZ benchmarks every role in the organisation against externally sourced remuneration data which informs us of median market rates. Inflation, impacts of Covid-19 on labour availability, scarcity of certain skills and other factors have increased salaries across all industries in New Zealand. TVNZ is subject to the same pressures as all employers. No doubt, Stuff is too.”
Neither would TVNZ outline in which departments the increased number of $100k salaries were most reflected (such as news and current affairs, content or sales, for example). TVNZ cited employee privacy for not answering that.
“We balance transparency with TVNZers right to privacy so we do not break this data down by further categories, such as remuneration by department.”
And when asked whether, given the benefit of hindsight, TVNZ thought such an increased number of staff on six-figure pay had been the right decision, they didn’t directly address that issue either, pointing to “market rate” in its reply.
“It’s appropriate to pay TVNZers market rate for the work that they deliver”.
The cost of cutting
TVNZ’s last round of cuts in March did not go to plan, and as a result, cost them more money.
In June, Stuff reported TVNZ had racked up $275,000 in external legal costs after it failed to consult staff about redundancies and cancelling shows, including blue riband current affairs programmes Fair Go and Sunday.
At the time, E tū union’s Michael Wood said it was a “very significant amount of money” which wouldn’t have needed to be spent if TVNZ had not breached the collective agreement in the first place.
That sum was also on top of the actual redundancy costs, which at the time were expected to be around $2.8m.
Plus, TVNZ was paying salaries to staff that it’d hoped to have already made redundant by that point. These payments had to be made while TVNZ worked its way through employment disputes - extra costs which carried on for around three months.
Wood said the money TVNZ had spent created “a real perception issue” given its cost pressures.
According to the 2023 annual report, $673,100 compensation was paid in total to employees whose employment was terminated.
This included a number of general managers across the business who were made redundant and left TVNZ in December 2023. That document defines compensation as including “redundancy entitlements, payment in lieu of notice, and any payments in settlement of disputes”.
The report for 2022 puts that compensation figure at $882,873, while in 2021 “$2,668,857 compensation was paid in total to 52 employees whose employment was terminated”.
This year’s report did not include the same line item of the previous few years, which had been under the heading “employee compensation on termination of employment”.
While these are short-term financial hits, TVNZ’s focus, as pointed out by Minister for Media and Communication Paul Goldsmith, is on long-term sustainability.
“We’ve been clear that we expect TVNZ to be financially sustainable, and to be innovative and responsive to changing customer demands,” Goldsmith said this month.
It’s not just at TVNZ
TVNZ is not alone when it comes to recent, and ongoing, cutbacks in commercial media companies.
NZME (publishers of The New Zealand Herald and owners of Newstalk ZB) and Stuff have both restructured recently and continue to make changes.
The most dramatic example came in July, when Warner Brothers Discovery decided to close Newshub entirely, which now sees Stuff produce a 6pm bulletin for WBD.
Asked whether TVNZ’s board had considered a similar decision and withdraw from news, TVNZ’s response was unequivocal.
“TVNZ’s board has not considered withdrawing from news,” a spokesperson said.
But TVNZ has publicly said it is looking at outsourcing “some areas” across content and technology.
Reporting by Newsroom this month said: “ Speculation is growing that TVNZ could do the same thing [as WBD] and outsource its news and perhaps make an even bigger saving”. The story also said “NZME… would likely be interested. The company entered the bidding process to produce TV3’s news but lost out to Stuff. But a more palatable (for TVNZ’s owners) and likely candidate is RNZ”.
In a statement to Stuff, TVNZ said:“There have been no conversations with NZME about outsourcing”.
In a recent episode of The Spinoff’s media podcast, The Fold, the concept of the TVNZ-RNZ merger being revived in some way, shape or form was discussed.
“I can certainly see a world where TVNZ will need to continue to make that newsroom smaller over time to get the cost efficiency,” Glen Kyne said, a former senior vice president and head of network at Warner Bros Discovery.
“The [TVNZ] board will not have an appetite for a loss and so that probably means every year, reviewing that commercial model and trying to figure out how to make it work. It’s not a fun place to be.
“And on the RNZ side, they would love, I’m sure, to have a stronger presence in video news in terms of their digital offering.
“They are unlikely, I think, in the current National government to have an appetite of this type of merger activity. However, the economics probably suggest that it’s the right way forward for the sector”.
The latest proposed changes at TVNZ so far include:
Stopping 1news.co.nz in February 2025, and focus the youth platform Re: News solely on video storytelling
Outsourcing some areas across TVNZ’s content workflows and technology (in FY26)
Investing in news on TVNZ+ and establishing a new, dedicated team for this function
Changes to some roster patterns