International Cat Speculators Since 2006

Oh boy, this is crazy.

The Government has thrown a lifeline to ailing private media company MediaWorks, which owns TV3, Four, and about half New Zealand’s commercial radio stations.

MediaWorks’ latest accounts show it has essentially received a $43.3 million loan from the Crown to enable it to renew its radio broadcasting licences for the next 20 years.

According to the accounts, which MediaWorks is obliged to file with the Companies Office because it is overseas-owned, the private company is paying 11.2 per cent interest on the money, which has been granted for just over four years.

The Government appears to have agreed to the deal despite MediaWorks taking the Inland Revenue Department to court over a disputed tax bill. The IRD alleges the company owes $24.5 million in tax, interest and penalty payments from 2002 to 2004.

Telecommunications Minister Steven Joyce yesterday said the money was not a loan, but a deferred payment system to help the radio industry during tough times in 2009. Earlier reports said MediaWorks had been due to pay the Government the $43m in October last year to renew its radio licences for the 2011-2031 period.

The Rhema Broadcasting Group has had to raise significant money to re-purchase their frequencies.

I understand from their campaign that this renewal demand was somewhat “out of the blue” in that the government decided one day to re-charge existing owners for their frequency rights. Because media organisations had no idea they were going to to recieve such a large bill, many have been caught short.

Rhema has recently announced it’s success in raising the money. Apparently MediaWorks has had some issues, given they run as a rather less than profitable for-profit enterprise.

I would venture that shutting down the government’s main free-to-air competitor in such a way would be a very, very bad look so hence the softening of the extortion demand.

Note: For those new to this blog, I will point out that I only listen to National Radio. My wife disagrees with my assessment of quality radio.

Update: Grammar in original title fixed.


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