Breathing space for Channel 31

COMMUNITY television station Channel 31 has been given some breathing space after creditors accepted a deed of company arrangement that will leave most with just 20 cents in the dollar.

But unsecured creditors could receive just 0.2 cents in the dollar if the administrator or the courts decide that a $100,000 claim from program producer CTV Perth and a $17 million claim from the Media Arts Group are allowed to proceed.

As part of the deed, creditor Uni 31 – made up of Edith Cowan University, Curtin University and the University of Western Australia – waived its debts of $341,372.15.

Another secured creditor, the WA Trotting Association has waived 25 per cent of the $45,431.41 owing to it and has offered to accept the remaining $34,077 in sponsorship.

The station also expects to gain $50,000 from book debts over the next three months, with the proceeds from that to be distributed proportionally among those creditors owed more than $600.

Channel 31 is now in the process of applying for $185,000 worth of Lotteries Commission funding, which is deemed vital to the station’s future viability.

It will also be applying for the permanent community television licence for Perth from the Australian Broadcasting Authority.

As many as six other groups are thought to be considering applying for the same licence. The application period closes on May 9.

Channel 31 managing director Andrew Brine told creditors the station had hired Savvy Marketing and Green Light Public Relations on a pro bono basis to create plans to boost the station’s revenue.

He said the station was also working with the Small Business Development Corporation and a management consultant to create a business plan for the organisation – a pre-requisite for gaining the permanent licence.

Some of the revenue raising plans that will be put into place over the coming weeks include an on-air appeal for funds, competitions and pitches to the corporate sector.

Melsom Robson partner George Lopez, who has been Channel 31’s administrator, said he believed the station had a viable future, providing it secured the Lotteries funding.

“The station could survive without it [the Lotteries funding] but it will have some cash flow concerns,” he said.

Another issue bubbling away in the background of the Channel 31 administration has been the broadcast agreement that allowed the station to go to air.

CTV Perth chairman Glen Darlington insists CTV had been part of the tri-partite group that held the original community licence for Perth and signed that over to Channel 31 in return for seats on its board and revenue concerns. Attempts to set out a new broadcast agreement over the past month have been unsuccessful.

Mr Darlington said Channel 31 had deliberately excluded CTV by applying for the permanent licence on its own and that his organisation was considering putting in its own bid.

“I know that other people have made an application and they’ve approached CTV to see whether we would go in with them,” he said.

Mr Brine said that joint applications for the licence were not allowed, which was why the station had put in a sole bid.

Creditors also raised concerns over the quality of signal and programming carried on Channel 31.

Mr Brine said complaints of program quality were unfair because much of the station’s content was put together by amateurs.

“We’re talking grass roots community television,” he said.

However, Mr Brine conceded that signal quality was a concern and was something the station was trying to address.

Much of the station’s financial woes have been put down to the fact that it had been undercapitalised from the start.

Mr Brine blamed that lack of capital on a decision by the previous WA government to renege on a funding deal when the station was started four years ago.