D’oh! MediaWorks Loses Fox Shows — For Now

Tomorrow MediaWorks TV will remove 20th Century Fox content, like The Simpsons and Sons of Anarchy, from TV3 and Four.

The broadcaster has agreed to take the shows off-air while it continues to negotiate a new deal with the distributor that isn’t volume-driven.

The biggest impact will be on Four, which is strewn with Fox comedies and dramas, whereas in recent months, because of the negotiating impasse, TV3’s Fox content has dwindled sharply.

Still, some of TV3’s highest-rating movies have been Fox titles, so the loss won’t go unnoticed.

“We launched the MediaWorks TV 2014 season without Fox content to key clients and media two weeks ago and the market response was positive, especially around our heightened commitment to local content,” MediaWorks chief Sussan Turner told staff this morning.

“A result of the financial flexibility we achieve by moving away from the big volume studio deals is that we can more readily pursue our local strategy – which gives us a distinct competitive advantage.”

MediaWorks TV already has more flexible deals in place with NBC Universal and Sony, and still has staples left over from its CBS Studios pact which aren’t part of CBS’ new deal with Prime.

The Fox development was revealed as part of MediaWorks announcing it will be out of receivership from tomorrow under a new structure that will make MediaWork Holdings the parent company of MediaWorks TV, MediaWorks Radio and MediaWorks Interactive.

Here’s the full release:

MediaWorks Group Managing Director, Sussan Turner has confirmed that the sale of the business to MediaWorks Holdings Limited (MWHL) will settle tomorrow, Friday 8 November 2013. 

“It is extremely pleasing that we have emerged in such good heart. As was promised at the outset, all our staff have been retained and it has been, on the whole, business as usual. We are grateful for the tremendous support the business has received from our team, customers, suppliers and the public. 

“A key focus of the transition to new ownership has been to right size the capital structure of the business. This has now been achieved and the business is no longer burdened by crippling debt,” she said. 

Turner praised the professionalism of staff, and the support of key partners which has seen MediaWorks continue to trade exceptionally well during the receivership period. 

Chairman of MediaWorks Holdings Limited, Rod McGeoch said the Board has worked hard to create an environment where innovation will continue to prosper. 

“Today heralds an exciting fresh start for this iconic, independent New Zealand media company. It’s a brave new world and we have embraced the need for more flexible commercial arrangements with studios. In our view, full output agreements for the television business are outdated and don’t make commercial sense in the New Zealand market. Instead we want our television and online businesses to have the advantage of selecting international shows that work for us,” he said. 

As a result, MediaWorks TV has a restructured deal with NBC Universal, retained selected CBS product and established a new content deal with Sony Television. 

“While we chose not to pursue an output deal with FOX, we are working to establish a new arrangement with them. 

“Quality international programmes are still important, however we can now capitalise on the financial flexibility we achieve through this targeted approach to invest in strong local content which we see as a major competitive advantage. 

“We will now move towards crystallising our plans for MediaWorks’ future, together with the management team. Our ability to leverage assets across all media platforms – television, radio, online and social – is a compelling proposition and puts us in a unique and extremely exciting position,” Mr McGeoch said. 

FREQUENTLY ASKED QUESTIONS 

How does MediaWorks TV acquire international content for TV3 and FOUR? 

MediaWorks acquires international content in two main ways; we have arrangements with studios to purchase programmes in bulk (buying all programmes that a studio makes is referred to as an “output” deal), and we buy individual programmes on the spot market (the open market for television).

Our current studio relationships are:

CBS: In 2012 MediaWorks chose not to renew their output deal with CBS, but retains key programmes like the CSI, NCIS and Top Model franchises through life-of-series deals.

NBC Universal: MediaWorks has a new deal with NBC Universal (replacing the old output deal) which includes a movies package and key programmes like SVU.

SONY Television: MediaWorks has a new spot market deal with SONY which includes many of the hottest new American series, including House of Cards and The Black List, as well as movies.

FOX: MediaWorks new board has chosen not to pursue an output deal with FOX and is working to establish a new arrangement with the studio. Programmes supplied by FOX include Homeland, Modern Family, Bones, Sons of Anarchy, New Girl and The Simpsons.

Many of the most popular international shows screening on MediaWorks TV are acquired on the spot market, including The X Factor franchise, House Rules, The Graham Norton Show, Grand Designs, and Underbelly.

Will MediaWorks TV continue to screen FOX content? 

FOX content will be removed from the TV3 and FOUR schedules for the rest of 2013.

This change is effective on settlement, so from tomorrow (Friday 8 November), no FOX content will be screened on TV3 or FOUR.

The impact on TV3 will be limited as no FOX programmes are currently screening in primetime. FOUR has a number of primetime series from FOX (seven hours of the primetime schedule) which will immediately be replaced in the schedules.

Amendments will be distributed to media shortly through the usual channels, the electronic programme guides will be updated, and new schedules will be available to the public at TV3.co.nz and FOUR.co.nz.

What is the rationale behind choosing not to renew studio output deals? 

MediaWorks TV Chief Executive, Paul Maher says that while studio relationships remain of the utmost importance to the business, the nature of the commercial arrangements have had to become more flexible.

The new arrangements free up budget to increase MediaWorks’ investment in local programming, which makes up 55% of TV3’s primetime schedule and includes many of the most watched programmes on the network.

“We are moving with the times and have embraced a different strategy with regard to international and studio content. In our view, full output agreements are outdated and don’t make commercial sense in the New Zealand market. Instead we want the advantage of selecting the international shows that work for us. We can then capitalise on the financial flexibility we achieve through that approach to invest in local content which we see as a major competitive advantage.

“So while there will be some scheduling changes in the short term, we have a much stronger financial position from which to aggressively target the programmes our viewers want, that drive ratings for our advertisers, and that are well aligned to our TV3 and FOUR brands,” he says.

TV3’S Most Popular Series in 2013 

(Top 20 series Year-to-Date 2013, all 25-54 demographic, Nielsen TAM)

1. The Block NZ

2. The X Factor NZ

3. 7 Days

4. Grand Designs

5. Kevin’s Grand Design

6. Bones

7. NCIS

8. Jono and Ben at Ten

9. The X Factor USA

10. The Graham Norton Show

11. The Block Australia

12. Home and Away

13. CSI

14. 3 News

15. Hamish & Andy’s Caravan of Courage

16. The Best of Graham Norton

17. Grand Designs Revisited

18. Sons of Anarchy

19. NCIS: Los Angeles

20. CSI: NY

 What will happen to FOUR? 

There will be a number of changes to the FOUR schedule but MediaWorks’ two-channel strategy hasn’t changed. FOUR remains the home of pure entertainment for 18-49 year-old viewers, and plans to purchase additional programming for the channel are well underway.