Revealed: How much TVNZ spent paying out newsroom staff in 2016

New figures show state broadcaster TVNZ has spent more than $2 million in the past two financial years on "early termination" payments to top presenters and other newsroom staff - and the business is warning staff it needs to make radical changes to remain profitable.

A Weekend Herald investigation has found:

• $1,000,819 was spent in the 2015 financial year paying out departing staff, while $1,087,518 was spent this year. • TVNZ has recently settled a legal dispute with presenter Peter Williams.

• Significant budget cuts have been forecast as staff are warned the company is on track to become "unprofitable". 

The TVNZ newsroom has weathered a tumultuous year, with several high profile presenters exiting the business, including weather presenter Karen Olsen, weekend newsreader Bernadine Oliver-Kerby, Fair Go's Gordon Harcourt and Breakfast hosts Rawdon Christie and Nadine Chalmers-Ross.

It's understood the broadcaster recently settled legal action from presenter Peter Williams, who was dropped from his Breakfastnews reading duties earlier this year to make way for the new-look Breakfast team, led by Hilary Barry.

Williams brought in his lawyer after his hours were reduced from five days a week to three days, reading the weekend news.

While individual settlement payments are not available, figures obtained by the Weekend Herald under the Official Information Act show TVNZ's news and current affairs department spent $1m in the 2016 financial year on early termination payments, while a further $85,000 was spent on settlement payments.

Those figures don't take into account recent changes to Breakfast, which took place after the financial year ended in June.

Now, staff have been warned the company is forecast to become unprofitable in just two years unless major changes are made. It is understood the broadcaster is set to warn its minister Amy Adams of the dire financial state.

In August, TVNZ reported a net profit after tax of $12.7m for the financial year ending June 2016, down from $28.1m the previous year.

Chief executive Kevin Kenrick confirmed staff had been spoken to about the need to create "a more sustainable future" for TVNZ.

In a statement, he said: "The current free-to-air model is not sustainable in the long term... This is a [free-to-air] industry wide challenge - TV Works [TV3] and Prime do not make money but are subsidised by their parent company's radio and pay TV operations."

TV audience is fragmenting as an increasing number of people use on-demand streaming services such as Netflix and Lightbox.

The news has left staff reeling and comes as past and present employees claim newsroom bosses have wasted thousands of dollars through poor decision making.

Data released to the Weekend Herald, which covers a 10-year period, shows a significant increase in early termination payments over the past two years, with the amount jumping from $306,000 in 2014 to $975,819 the following year, and more than $1m this year.

Several insiders complained to the Weekend Herald of a "culture of silence" around decision making and expressed frustration with management who continuously "reinvent the wheel" without delivering meaningful change.

But when asked why they hadn't challenged the company in court, the same reasons repeatedly surfaced.

"I can't afford the time, money or negative publicity," said one former presenter. "You're fighting a beast."

Nadine Chalmers-Ross recently spoke out against the handling of her situation in an interview with Woman's Day, saying she read the news about Jack Tame and Barry taking over in a newspaper.

"No one was saying anything at work - we all asked questions but nothing was confirmed. I'm sure there were reasons for that, but it wasn't easy to deal with. The uncertainty was very stressful."

Kenrick is standing by news boss John Gillespie, saying he had done "an outstanding job in a period of unprecedented change in our industry".

In a statement, Kenrick said: "Under John's leadership, our news audiences have grown and our newsgathering costs have reduced - a stunning achievement both editorially and commercially."

Cost-cutting and restructures have become a regular occurrence across the media industry, as organisations adapt to changes in audience consumption.

However, TVNZ sources say several of the newsroom changes haven't saved money. Recent changes to Breakfast, for example, are thought to have significantly increased the programme's salary costs, with Hilary Barry believed to be paid twice that of Rawdon Christie.

In another instance, TVNZ was forced to pay a presenter a full year's salary after ending their contract early.

Over the past 10 years, TVNZ has spent a total of $5.7m in early termination payments to newsroom staff. Of that total, $2.3m was spent in the past three years.

An additional $232,000 was spent on settlement payments during that same three-year period.

TVNZ said it couldn't distinguish settlement payments made as a result of a dispute of threatened legal action, as requested by the Herald, as the information wasn't easily identifiable. 

Kenrick stressed that the current review is a company-wide issue that is being openly discussed with all staff.

"With 2.2 million New Zealanders watching our content per day, no other local player is better placed than TVNZ to lead the development of a new sustainable model for local video content.

"We're committed to making sure New Zealanders are able to watch the stories that matter most to them and believe viewers will continue to demand local stories and local voices on screen."

TVNZ net profit after tax:
2016: $12.7m
2015: $28.1m
2014: $14.2m
2013: $14.4m
2012: $14.2m

- NZ Herald