Bids for TV channel a costly exercise

Press, 6 December 1985, Page 30

Bids for TV channel a costly exercise

PA Auckland The millions being spent in bids for the third television channel could turn the hearings into a trial by financial exhaustion, says Broadcasting Corporation chairman, Mr Hugh Rennie. One of the four big-spend-ing applicants, Energy Source Television, says each bid will cost $2 million. Others say that figure is too high.

But Mr Rennie said any of the four commercial applicants - Southern Cross Television, Impact Television, Tele-Vid Region, Ltd, and Energy Source - would be “doing quite well” if their hearing costs alone were as low as $5OOO a day. The corporation was paying up to $2OOO a week for part-time legal representation at the hearing, plus airfares and accommodation for the Wellingtonbased counsel, Mr Rennie said. <

It would be very wrong, he said, if any applicant had to drop out because of cost. Sir Michael Fowler, a director of Southern Cross Television, said the group had budgeted to spend $1,750,000 by next April.

“It is democracy run rampant,” he said of the long hearings. “I think it is grossly unfair to all the applicants. There must be a better system.” He favoured the British system where applicants made written submissions and were then interviewed by a tribunal. It was likely unsuccessful applicants would appeal after the tribunal decision, he said.

Sir Michael said his group and probably all the other applicants were too far down the track to pull out. “And besides, we want the warrant.”

Some applicants believe the Broadcasting Tribunal hearings could drag on until early 1987, although others predict a mid-1986 finish. Energy Source’s managing director-designate, Mr John McEwen, said senior counsel cost about $2OO an hour and juniors $lOO. His company also had a full-time project manager, principal consultant, word processor operator and two part-time staff working on the application. He would not divulge their pay. Energy Source earned

money for the bid from making its “This Is New Zealand” production for American cable channels as well as other overseas and local programmes. Aotearoa Broadcasting system has already spent about $lOO,OO on its bid, says its spokesman, Mr Derek Fox.

“We are being very, very badly affected. It is grossly undemocratic,” he said.

Mr Fox said his group was investigating its budget and had even thought of applying for legal aid, “but I don’t think that can be done for companies.” “We have spent about one-third of what one of our competitors paid out in the first two weeks of the hearing,” he said.

He was canvassing members of Parliament and private companies for aid. Impact Television’s managing director, Mr Richard Wall, said the $2 million estimate was “considerably exaggerated” but the cost of a bid might stretch to $1 million if the hearing dragged on next year. The company has three full-time staff working on the application.

“We are disappointed we cannot get up and running as broadcasters and the B cannot have the ts of a third channel until 12 months later than originally planned.” A producer, Mr Tom Parkinson, of Tele-Vid Region, Ltd, said applicants were “fairly paranoic” about divulging their exact costs. “We reassembled our budget in October in preparation for a longer hearing.” He also said the $2 million figure was exaggerated: “It’d be ridiculous to spend that amount.” Tele-Vid had a staff of 10 people working on programme making. “We hope our turnover this year (from October) will be $1 million and the profits will go towards the application.” Shareholders were a potential source of money “but we want to stand on our own two feet.”

The taxpayer does not escape a share of the cost. Tribunal expenses so far include $40,000 sitting fees for the six members, $21,000 in airfares for the three Wellington members, and $6400 accommodation expenses.