Clare Curran
Broadcasting Spokesperson

17 June 2013

Govt inaction plays part in MediaWorks woes

The Government’s refusal to break the stranglehold of pay-TV company Sky on the media market has contributed to the position MediaWorks finds itself in today, says Labour’s Broadcasting spokesperson Clare Curran.

“Instead of throwing a $43 million loan at MediaWorks three years ago to bail them out of a short term sticky situation, the Government should have done what most other countries do and free up the market to enable free to air television to compete with pay-television.

“Pretty much every other country has a media regulator and a set of rules governing media ownership and behaviours – but not New Zealand. This has allowed a skewed environment to emerge and left one of our free-to-air operators in receivership.

“Fast broadband and new technologies should be opening up new markets for content to be brought into the country. It should be opening up new markets for our media companies and allowing more New Zealand content to be distributed

“Instead, Sky has cornered the market. It has locked up vast amounts of content and New Zealand is becoming a media backwater.

“Government inaction on Sky’s dominance has contributed to an important media company being forced into voluntary receivership. A bailout isn’t what’s required - but Government action on the monopoly position of Sky is.”

Clare Curran said serious questions have also been raised about whether the restructuring will enable Ironbridge, as the overseas owner, and MediaWorks' bank creditors, to benefit from the business walking away from a significant tax liability.

“Is receivership being used as a means to leave behind IRD debt at the expense of New Zealand taxpayers who have supported the business in the past?

“If that’s the case then this raises issues of tax avoidance by overseas interests while putting at risk the viability of an important media organisation. IRD should be looking now to see if it should act to intervene in the receivership before it is too late.”

ENDS

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