The NZ Herald has learned a clause in the contract held by Syco Entertainment and FremantleMedia, owners of the format, stipulates the show can't be brought into disrepute in accordance with the third-party license agreement.
It's understood that special dispensation would have needed to be sought to use Brider, and MediaWorks failed to get permission. A representative for Cowell said he had no knowledge a convicted killer was to appear on the show.
The NZ Herald contacted Ann-Marie Thomson, Syco's global head of media, Ben Todd, Syco UK's head of media, and Ian Hogg, chief executive of FremantleMedia Australia - which co-produces The X Factor NZ with MediaWorks - for comment.
A spokeswoman for FremantleMedia and Syco told The Diary yesterday: "We have latterly been made aware of the situation and take this matter very seriously.
"We are currently looking into it with the local producer, MediaWorks."
Brider was sentenced to eight and a half years' imprisonment for the manslaughter of 16-year-old Jeremy Frew.
Brider has made it through to boot camp auditions.
He says he's not asking for mercy but wants to move on with his life.
However, his victim's mother, Donna Travers, is furious with producers of the show and says they should have ensured the full facts of the crime were disclosed to audiences.
MediaWorks must front up to Ms Travers, Syco Entertainment and FremantleMedia, she says.
Yesterday, MediaWorks said the show would include an apology to the family this weekend. Earlier, MediaWorks would not answer The Diary's questions about whether a contractual clause had been breached, but issued the following statement.
"Shae Brider disclosed his criminal record when he entered The X Factor NZ and as a standard part of the process a police check was run ... The X Factor NZ acknowledges the impact Shae's past actions have had on his victims, and apologises for any distress that has been caused.
"However it is important to note the NZ justice system judges Shae has paid his debt to society, and now has a second chance to make a positive contribution."
Will that satisfy the owners of The X Factor franchise?
Cowell knows the value of redemption stories, and his reality shows are no strangers to pulling on emotional heartstrings.
But in my view, so long as the family of the teenage victim continue to voice their displeasure about Brider's involvement on the show, and the handling by TV3 producers, he won't be happy.
MediaWorks may well get a big ticking off, but whether that will result in a contractual penalty breach is unclear at this stage.
The second series has received $800,000 in taxpayer funding from NZ On Air for 41 episodes.
