Radio warrant tied to negotiations for 3ZM

Press, Volume CXI, Issue 32705, 7 September 1971, Page 19

Radio warrant tied to negotiations for 3ZM

The issue of a private radio warrant granted to a Christchurch company would be withheld until the company had negotiated with the New Zealand Broadcasting Corporation for the sale or lease of Station 3ZM, which had been run at a loss for the last three years, the Broadcasting Authority said in a decision released yesterday.

There might not be enough revenue to support three commercial stations in Christchurch, but there should be sufficient to support two, the decision said.

The authority’s decision, based on Christchurch hearings which ended in June, refused an application by the Canterbury Broadcasting Corporation, but said it was felt that the Avon Broadcasting Company’s application should be granted. But the grant would be conditional on the company’s negotiating, within three months, the sale or lease of 3ZM, or being able to satisfy the authority that it was unable to reach agreement with the N.Z.B.C. for the sale or lease of the station “. . . on such reasonable terms and conditions as the authority may approve. . . .”

If the company was unwilling to negotiate with the N.Z.B.C. or was unwilling to accept conditions for the sale or lease of 3ZM which the authority considered reasonable, then the authority would notify the company that it proposed to revoke the warrant. “Anomalous position" ft was noted that 3ZM had run at a loss for three years without any apparent effort being made to rectify the position other than a change in musical format, the authority said.

“This appears to be an anomalous position, having regard to the fact that the corporation is having discussions with the Government concerning an increase in licence fees,” the decision said.

An improvement in the economic position of the N.Z.B.C. in relation to 3ZM might well be achieved by the sale or lease of the station on reasonable terms.

None of the statutory members of the N.Z.B.C.’s board gave evidence at the hearing, and the. authority was thus not provided with an expression of the present policy of the board, the decision said.

“lliere appeared to be noone who could state what the policy of the corporation was in relation to a number of matters.”

Conditions of leasing 3ZM proposed by the N.Z.B.C. board in 1970 at the request of the authority were such that it could be inferred that the board had made them so onerous as to preclude the possibility of leasing, or to ensure that the corporation would retain control of the programme format if an agreement was reached. If the corporation was to lease 3ZM, it could expect an improvement in its finances, and bearing in mind the corporation’s desire for an increase in licence fees, it was difficult to reconcile its reluctance to lease "he station, the authority said. “In our view the corpora-

tion should be prepared to sell or lease the transmitting station of 3ZM to a private warrant holder on reasonable terms without the imposition of the conditions previously stipulated by the corporation.” $1,123,052 deficit The authority also said that the coiporation should actively consider the unprofitable position of all its ZM stations, and noted that in the year ended March 31, the commercial radio operations of the N.Z.B.C. showed an over-all deficit of $1,123,052. When the applications for warrants by the Avon and Canterbury broadcasting companies were heard in April and June, they were opposed by the N.Z.B.C. and by Commercial Broadcasting Services, Ltd, which said it had been negotiating with the N.Z.B.C. about the purchase or lease of 3ZM.

The authority (Mr R. T. Peacock, of Wellington, chairman, Mr R. B. Miller, of Christchurch, and Dr H. C. Holland, of Auckland) said it was not satisfied with the proposals put forward by the Canterbury Broadcasting Company, and that as .only some of the directors gave evidence the authority had been unable to form an opinion as to the capabilities of those who did not give evidence. On the evidence, there was also some doubt about the financial ability of the company to carry on the proposed service, the authority said. Nor had anybody been appointed station manager, programme director, or news editor. Avon directors The directors of the Avon company are Messrs R. J. Stewart, C. P. Greenslade, I. J. Kirkpatrick, P. L. Mortlock, and N. Wesney. In its application, the company said it proposed to transmit 24 hours a day seven days a week. The range of the station was estimated at 30 miles, using a transmitter at Marshland.

The authority said in its decision, that if 3ZM was leased or sold to Avon, the capital of the company would be an amount approved by the authority, and the authority would also approve the number of shares to be offered to the public. If the lease or sale of 3ZM did not go ahead, the Avon company’s capital would be $400,000 in 50c ordinary shares which should be offered for public subscription in the area to be served by the station.