City TV withdraws

Press, 16 July 1983, Page 21

City TV withdraws

PA Auckland One of the two applicants for a private television licence has pulled out of the fight at the last minute — because of a price hike. City Television, Ltd, in Auckland and Wellington, said that charges by the Broadcasting Corporation were much higher than expected and would mean a loss of about $lO million in the first three years. “The decision to withdraw has been taken with a great deal of regret and not inconsiderable anger,” City’s managing director, Mr Andy Tyler said yesterday. Northern Television, Ltd, the other applicant, said that it was reassessing its position in the light of the charges. Its manager, Mr Graeme Douglas, said Northern would not file warrant submissions by the deadline set for a tribunal hearing but was still “interested” in regional television. A Broadcasting Tribunal hearing for the morning warrant begins on August 2 but City will not be there because of: • $3 million wanted as “up-front” money;

• rental of $5Ol an hour; ® a share of operating expenses of $594 an hour. Included in the transmission charges would also be $299 an hour for a microwave link and the cost of direct facilities to Avalon which would push the rental to about $l5OO an hour. Mr Tyler said no initial entry fee had ever been mentioned and the $3 million wanted by BCNZ came as a complete surprise. He said that City’s application for TVI transmission from 6 a.m. until 11.30 a.m. on week-days and similar hours at the week-end had been based on charges of about $5OO an hour, a figure obtained privately from the Post Office. “Northern’s prices were about $3OO an hour,” he said. “The BCNZ knew last year that it was required to set a scale of charges but left it until July 14 to advise the applicants what they would be. “It means that all the effort Citv Television has put into preparing its case for the breakfast-morning warrant has been wasted. “Is it an attempt to kill

the whole idea of private enterprise involvement in television, despite the fact that the Government has declared itself in favour?” he asked.

Mr Tyler said proposed annual charges by BCNZ were about three times what City had budgeted for and four times what Northern had anticipated. Both private companies were budgeting for a substantial loss in the first year of transmission. But the new scale of charges, he said, would mean a loss of about $l5 million in the first three years for Northern Television, a subsidiary of Wilson and Horton, Ltd, publisher of the “New Zealand Herald.” Mr Tyler said: “We believe these new charges could kill the whole idea of breakfast morning television because no company could seriously consider broadcasting on these terms.” Alternative Television, which is part-owned by NZ News, Ltd, and was an early contender for a private warrant, withdrew its application some months ago.