David Seymour is urging Kris Faafoi to "recognise the folly" of subsidising TV news, after Newshub-owner MediaWorks announced plans to sell off its TV assets.
Seymour said despite MediaWorks seeking a buyer who can turn a profit, that's "never going to happen when your major competitor openly and publicly said it's not going to make a profit or pay a dividend".
The ACT Party leader said Kris Faafoi, Minister of Broadcasting, Communications and Digital Media, needs to "recognise the folly of subsidising TVNZ, and not requiring a dividend is an unfair subsidy".
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Seymour added, "Then he should demand TVNZ pay a dividend so that whoever buys MediaWorks' TV arm is entering into a competitive market, not a rigged market."
Faafoi said in a statement to Stuff that the decision to put MediaWorks' TV assets up for sale "is a commercial decision MediaWorks has made", and that he "does not want to intrude on that sales process".
MediaWorks has signalled throughout the year it's struggling to operate a TV channel in a landscape where its competitor TVNZ does not have to pay a dividend.
Duncan Garner, host of The AM Show, dimmed the lights on the show in August, in a challenge to the minister to "save New Zealand television and news channels before it's too late".
"They weren't bluffing," Seymour said.
Three is responsible for about 30 percent of the local television production in New Zealand, and Seymour suggested it would be bad for New Zealand if there was only one state-backed TV news provider.
MediaWorks CEO Michael Anderson made a similar point in an interview with The Spinoff in August, contemplating the reality of New Zealand having just one TV newsroom.
Seymour said government subsidies in the TV news business "may result in all TV news coming from the Government, and that's the kind of policy we expect out of Pyongyang [the capital of North Korea]".
"It's certainly very bad policy for the Government to subsidise one TV station, pushing its competition out of business."
He said subsidising both MediaWorks and TVNZ would be "worse", because it would create a "full state takeover of TV broadcasting" in New Zealand.
"It would be far better to leave a level playing field and have two competitions that are independent of the Government."
Seymour said making TVNZ "sing for its supper" would require "courage and principle from the Government... So I'm not holding my breath".
He said there is no doubt that TV is being disrupted by new media platforms, but said the Government's intervention has "meant that MediaWorks has been fighting with one arm tied behind their back".
"Of course people all over the world are trying to figure out how media models can operate in the midst of technological disruption... I'm just saying the New Zealand Government is making it worse."
He said New Zealanders should "never be in the position where their only source of media broadcasts about political news is from Government-owned media".