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MediaWorks confident of sorting out TV

NZN 30/05/2017 Paul McBeth

Broadcaster MediaWorks is confident a new strategy will turn around its television business after a poor performance in 2016 drove the bottom line into the red.

The Auckland-based company posted a net loss of $14.8 million in calendar 2016, due in part to $6.4m of impairment charges on the TV business which left the value of the unit's goodwill and broadcasting licences at nil, according to accounts filed with the Companies Office.

MediaWorks changed its balance date in the year-earlier period when Oaktree Capital took full ownership of the media group, and it posted a $7m loss in the 15 months ended December 31, 2015.

In a presentation by chief executive Michael Anderson and chief financial officer Ciara McGuigan to provide like-for-like, revenue fell 5.7 per cent to $298m, driven by an 11 per cent decline in TV ad sales to $130m.

"The TV result, in particular, is a reflection of the disruption this business was operating in during the first half of last year and certainly the year before that," Ms McGuigan said.

Mr Anderson, who took over the reins in August last year, told BusinessDesk the decline in free-to-air television was a global phenomenon.

And while MediaWorks had lagged behind the market in 2016 he was confident a new strategy to try to lock-in prime time viewers for longer and compete against international content platforms with local fare would help it bounce back from a "disappointing" 2016.

Mr McGuigan said the business has "stabilised" since 2016 with the financials running ahead of budget as it nears the end of the first half.

Part of the decline in TV advertising was due to the closure of the TV4 channel and introduction of Bravo, which the accounts show required a $4.5m investment from Mediaworks.

The company went through a period of turmoil last year when then-CEO Mark Weldon departed following the resignation of long-running news anchor Hilary Barry during the integration of the news operation.

Despite the travails in TV, MediaWorks' radio business remained robust in 2016, with revenue largely flat at $156.9m, while digital ad sales slipped to $11.1m from $11.9m.

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