So how financially constrained is the Nine Network at the moment? Very, judging by a swiftie the network, lead by its bean counters and cost cutters (AKA Ian Law and John Alexander) are trying on by substituting a New Zealand drama called Outrageous Fortune on Monday nights.

Nine is showing Outrageous Fortune (OF) on Mondays at 10.30pm — the program is a New Zealand production, allowable under the Closer Economic Agreement we have with NZ. It bombed in TV terms with just 368,000 people watching but that’s not the point. It is not a ratings winner or designed to be. It is designed to be a cheapskate way of earning Australian drama points.

Last month James Packer threatened to repudiate Australian TV content rules if another player (a fourth network) is allowed in. Is he starting down this route, despite being protected from any competition by the Howard Government until at least 2012?

The Screen Producers Association of Australia has written to Nine boss Eddie McGuire asking for clarification on the screening of the Kiwi program. They told Crikey they will not comment until they have had a reply from Nine.

TV industry sources freely admitted to Crikey that Nine is counting OF as a first run Australian drama, as they can under CER. The issue of including New Zealand content under this scheme was fought all the way to the High Court and this is the first time an Australian TV Network has tried to go down this route.

Under old regulations Nine had to show it at 8.30pm for at least one episode: it could then shift it to a later timeslot. Under the new rules (since 2002) so long as it starts at 10.30pm, Nine will be able to claim the content points for the 10.30pm to 11pm slot and the 11pm to 11.30pm slot.

TV insiders estimate that by using OF in this manner Nine will be able to claim 66 Australian content drama points, around 20% of the annual requirement in drama.

Australian drama cannot be shown in NZ in the same manner, despite CER and the NZ Government subsidies drama through a program called New Zealand On Air (worth around $NZ 10 million). OF received a subsidy of around $400,000 per episode according to estimates based on the annual reports of New Zealand On Air for 2004 and 2005. It is about to go into production for series three.

Nine has paid anywhere up to $300,000 an episode. That sounds a lot but it is under the minimum drama spend per episode set by ACMA, or $315,000, about to rise to around $320,000 in 2007.

But compared to the $420,000 or more McLeod’s Daughters costs per episode and the estimated $500,000 per ep that Nine’s new drama Sea Patrol is costing, OF is a cost saving, especially if they can do some sort of contra on some Nine product and licence it into NZ.

Nine would only receive $10,000 to perhaps $20,000 per ep for licensing its local drama into the NZ market: it’s called an acquisition fee.

But the most interesting reason is that if Nine can use this as a precedent and get away with it, it will be able to use the NZ program next year, build up local drama points and save itself the millions of dollars from making a local drama series next year.

Nine though, and PBL media, are only exploiting a loophole this government allowed to happen when they didn’t demand reciprocal rights from the Kiwis under CER.

The Seven network screened two Kiwi docudramas Tuesday night, Border Patrol and Serious Crash Unit which were in the mode of Seven’s Border Security. Seven could claim local documentary points if it wants to but probably won’t because it has so many already.

The question is, does Nine claim local doco points from screening the Kiwi-made Motorway Patrol on Friday nights (except when the Test cricket and swimming has been on)?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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