TVNZ7's demise will be Sky TV shareholders' gain - analyst
Public broadcasting advocates might be squealing, but one share analyst is licking his lips at the government's presumed plans for TVNZ.
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Public broadcasting advocates might be squealing about the government's widely-assumed plan to relieve TVNZ of its obligation to support the commercial-free TVNZ7.
But from the perspective of a Sky TV shareholder, the news is all good.
Anticipating changes to TVNZ's mandate, Forsyth Barr analyst Rob Mercer said today that "The new TVNZ, under National’s leadership, will have a clear mandate to re-establish profit as its primary objective and for the senseless taxpayer funded projects to be axed."
A widely expected parallel development is that the government will change NZ on Air funding rules to make pay TV providers eligible for funding.
Already, TVNZ7's Freeview sibling, TVNZ6 is set to relaunch as a commercial, youth-focussed channel, called U, from March 13.
And while one of TVNZ6's mainstays - its ad-free Kidzone segment - is set to migrate to TVNZ7; TVNZ7 is widely tipped to be scrapped when its funding (provided by the Labour government) runs out in June next year. From that time, parents with Kidzone-crazed children would have to take a Sky TV subscription to get their dose of Kane.
Already, TVNZ has announced plans to launch Kidzone as a 24-hour Sky TV channel from May 1 (where it will join TVNZ's Sky TV-only Heartland, plus TVNZ6 and TVNZ7, which are broadcast over both Freeview and Sky TV).
Beyond the anticipated demise of TVNZ7, and NZ on Air funds being made available to Sky TV programme makers, Forsyth Barr's Mr Mercer sees two other recent pieces of news as positives for the long term success of pay TV.
One is that NewsCorp has got the nod to increase its bid in its effort to acquire 100% of BSkyB in the UK.
The other is that, in Australia, Foxtel's owners (News and Telstra) seem in agreement to buy rural and regional pay TV provider Austar.
Throw in Sky TV's recent jump in profit, and it's no surprise that Mr Mercer has an accumulate rating on Sky TV, with a DCF valuation of $6.36.
Sky TV shares (NZX: SKT) were up 1.28% to $5.55 in early afternoon trading.
Chris Keall
Fri, 04 Mar 2011
Fri, 04 Mar 2011
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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TVNZ7's demise will be Sky TV shareholders' gain - analyst
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