Govt was advised against Mediaworks deal - report
Officials warned the Government against making a deal with MediaWorks which allowed the struggling company to defer a $43 million payment for its radio licences.
Communications Minister Steven Joyce has denied the deal amounted to a taxpayer-funded loan and says MediaWorks, which owns TV3 and a network of radio stations, is up to date with its payments.
TV One reported last night it had documents which showed the Ministry of Economic Development told the Government it did not see a strong case for the deal, while Treasury said it would effectively see the Government acting as a bank and taking on additional risk.
The report said Mr Joyce initially turned MediaWorks down but its former head, Brent Impey, subsequently talked to Prime Minister John Key and the arrangement was eventually approved by the Cabinet.
TV One said its documents showed that when Radio Rhema and the Radio Broadcasters Association approached Mr Joyce they were turned down.
But when MediaWorks lobbied for the deferral, the offer was opened up to all the networks.
Labour MP Trevor Mallard said tonight the deal was clearly set up for MediaWorks.
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Comments and questions10
This is a disgrace - another Government handout/subsidy to their mates or political allies
Plastic Waka to this to what next ??
Loan to National party to fund their election campaign??
Meanwhile the man in the street suffers and the Govt keeps telling us how tough it is and how EVERYONE needs to tighten their belts.
Media Works is another private equity failure. And now taxpayers are assisting. What next?
We are another broadcaster that lobbied the government for this facility.It is not a loan,but deferred payent(in advance) at a very high interest rate.NZ is the only country we know of that requires broadcasters to pay in advance this way.There is also a historical precedent.There were other broadcasters paying as they went(not Mediaworks) in the previous twenty years.
yep...it's costing Mediaworks 11% interest p.a. to pay for the right to broadcast fresh air...and thebbaove poster is right...it's not a loan..it's an I.O.U
actually, a very good deal for the Govt for no outlay.
Wonderful, now the government will have more media on it's side for the election.
Is it possible that TV1, the Herald and media all are so carefully on the side of big bussiness, which must look after it's ''friends''.
You call it a deferred payment might be the legal definition but the economic reality is it is a loan. In fact what this says to me that instead of lending Mediaworks the money and taking security over assets etc they have just agreed to them paying on the drip feed.
If the interest is so high why did they not borrow the money from the bank? They did it because this was the best deal they could get and therefore by default is not a good deal for the government.
By the way 11% is not cheap compared to what other businesses are paying in similar situations.
this government is out of its depth in regard to business.
Agreed. Media is works is hardly going to seriously bite the hands that feeds/gives it a license payment holiday.
- watch this space.
Well, if you "cap", criticise, then outright "slash and burn," the public service - the very officials who advise the politicians - what do you expect?
Politcians have key people in banking circles, so as long as they make money, they just do not care about the longterm damage to people and New Zealand....just make a ''fast buck'' ia the name of the game, as a key member might say and if lost, just leave politics and pursue else, so a key memeber says .
Just another private equity failure- this pig looses about a million a day - great deal these, you turn up to work every day of the year and you are minus a million before you have coffee, look at the empty unsold ad space, go for lunch, then go home - the Aaahhh the life of a TV exec
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