TVNZ Scoping Study
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Cabinet agreed on 3 November 1997 to investigate the crown’s ownership interests in TVNZ.

This report was commissioned by treasury following the 3 November 1997 cabinet decision. The report was prepared by a consortium led by ord minnett. The report was completed in may 1998.

Note that parts of the document have been deleted or summarised by the government in accordance with sections 9(2)(b)(ii), 9(2)(ba)(i), 9(2)(i) and 9(2)(j) of the official information act, which allows for commercially sensitive information to be withheld where this outweighs the public interest in making the information available.

Where text has been summarised it is contained in square brackets. Where text has been deleted, "[text deleted]" has been inserted.

 

 

1.0 Executive Summary

1.1 Introduction
1.2 Operating Issues
1.3 Television Industry Developments
1.4 Ownership Issues
1.5 Sales Issues

 

 

2.0 Business Description

2.1 History
2.2 Business Overview
2.3 New Zealand Television Market
2.4 TVNZ Market Position
2.5 Revenue Sources
2.6 Programme Costs and Availability
2.7 Other Costs
2.8 Corporate Structure
2.9 Assets
2.10 Liabilities
2.11 Human Resources
2.12 Taxation

 

 

3.0 Financial Summary

3.1 Historical Financial Performance
3.2 Divisional Performance
3.3 Historical Financial Position
3.4 Historical Cash Flows
3.5 Performance Assessment

 

 

4.0 Current Strategic Issues

4.1 Digital Transmission
4.2 Separation of BCL
4.3 CLEAR
4.4 SKY
4.5 National Transmission Agency

 

 

5.0 Future Operating Strategies

5.1 Introduction
5.2 EBIT Improvement
5.3 Digital Transmission of Free-to-Air Channels
5.4 Conversion of BCL to Digital Transmission
5.5 Acquisition of Spectrum
5.6 Set Top Boxes
5.7 New Media
5.8 CLEAR Contracts
5.9 Sale of CLEAR Shares
5.10 Strategic Equity Partner

 

 

6.0 Public Service Broadcasting

6.1 Introduction
6.2 Overview and Summary
6.3 Previous Debate and Discussion
6.4 Minority Interest Programmes
6.5 NZ On Air 6.6 SPADA
6.7 Other Views
6.8 Trends in Broadcasting and their Implications
6.9 Discussion and Conclusions

 

 

7.0 Potential Restructuring Impediments

7.1 Te Reo Maori
7.2 Competition
7.3 Regulatory Environment
7.4 Other Potential Impediments

 

 

8.0 Financial Model

8.1 Model Basis
8.2 "Base Case" Assumptions and Projections

 

 

9.0 Valuation

9.1 Methodology
9.2 TVNZ Under Crown Ownership
9.3 Trade Sale
9.4 Public Flotation
9.5 Separation of TV ONE and TV2

 

 

10.0 Sale Options, Methods and Issues

10.1 What Should be Sold?
10.2 Best Method of Sale?
10.3 Partial or Full Sale?
10.4 Value "Clawback" Mechanisms
10.5 Strategic Equity Partners at Different Levels
10.6 Timing: Now vs. Later?
10.7 Foreign Ownership Restrictions
10.8 Sale Implementation

  11.0 Important Notice



Appendices

I Terms of Reference
II Valuation Information III Other Potential Restructuring Impediments
IV TV ONE Separation Structures
V Banking Facilities
VI IPO Costs


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