NZME directors ‘have concerns’ about businessman Jim Grenon taking editorial control

NZME’s directors have fired their own shots in the war for control of the media company, saying they have concerns about a takeover bid including the risk of businessman Jim Grenon taking editorial control.

In a statement to the NZX, the board said it was delaying its annual shareholders meeting until June and opening up nominations of other directors.

Grenon, a New Zealand resident since 2012, bought a 9.3 percent stake in NZME for just over $9 million early in March.

NZME is publisher of a number of newspapers, including The New Zealand Herald, as well as operating radio stations and property platform OneRoof.

Within days of taking the stake, Grenon had written to the company’s board proposing that most of its current directors be replaced with new ones, including himself, and said the performance of the company had been disappointing and he was wanted to improve the editorial content.

NZME has now told the stockmarket it had concerns whether Grenon’s proposals were in the best interests of the company and shareholders. — RNZ News

Dear NZME Board,

I was once a columnist for The New Zealand Herald, but I’m too left wing for your stable of acceptable opinions and now just run award-winning political podcasts instead.

Normally as board members of a financialised media company in late stage capitalism with collapsing revenue thanks to social media, you don’t generally have to consider the actual well being of our democracy.

Let me be as clear as I can to you all.

You hold in your hands the fate of Fourth Estate journalism and ultimately the democracy of New Zealand itself.

As the largest Fourth Estate platforms in the country, your obligations go well beyond just shareholder profit.

Alt-right billionaire Jim Grenon has in my view been extremely disingenuous.

The manner in which NZME has been sold as underperforming so that the promise of a quick buck from OneRoof seems the focus point is made more questionable because I suspect Grenon’s true desire here is editorial control of NZME.

His relationship with a far-right culture war hate blog that promotes anti-Māori, anti-trans, anti-vaccine, climate denial editorial copy alongside his support for culture war influencers suggest a radicalised view of the world which he intends to implement if he gains control.

Look.

NZME is right wing enough, your first editorial in The New Zealand Herald was calling for white people to start war with Māori, Mike Hosking is the epitome of right wing commentary and the less said about Heather Du Plessis Allan, the better, but all of you acknowledge that 2 + 2 = 4.

Alt-Right billionaires don’t admit that.

Alt-right billionaires tend to lean into divisive culture war rhetoric and are happy to promote 2 + 2 = whatever I say it is.

You cannot allow alt-right billionaires with radicalised culture war beliefs take over the largest media platforms in the country.

This moment demands more than dollars and cents, it requires a strong defence of independent editorial content, even when that editorial content is right wing.

The NZ Herald, Heather and Mike are without doubt right wingers, but they are right wingers who pitch their argument within the realms of the real and factual.

Alt-right billionaires do not do that.

If NZME is taken over and the editorial direction takes a hard right culture war turn, you will be dooming NZ democracy and planing us on a highway to hell.

You must, you must, you must stand against this attack on editorial independence.

Republished from The Daily Blog with permission.

Article by AsiaPacificReport.nz

KNIGHTLY VIEWS: By Gavin Ellis

Excoriating is the word that may best describe expat Canadian James Grenon’s 11-page critique of NZME. His forensic examination of the board he hopes to replace and the company’s performance is a sobering read.

You may not have seen the letter. At the time of writing, it was still sitting behind The New Zealand Herald’s Premium paywall. It is, however, available through the New Zealand Stock Exchange. You can access it here.

Grenon is highly critical in a number of areas that he breaks down into sections in the letter. The headings include:

“The combined performance of the two core businesses has been mediocre, to sliding, for the past eight years, despite a temporary period of covid gains.”

“There has been a consistent pattern of over promising and under delivering since covid.”

“Public disclosure is weak, with a slant that I interpret as supporting the status quo.”

Grenon’s letter includes an analysis of NZME’s share price in relation to the perceived value of its OneRoof real estate marketing arm, and the company’s dividend policy. He claims “the disclosure on these two critical elements is, in my opinion, lacking or even misleading”. He also criticises levels of management-level remuneration and high levels of staff turnover which he says “does not suggest a happy working environment”.

NZME’s board has yet to respond to the letter stating — in a note to the New Zealand Stock Exchange accompanying the release of Grenon’s letter — that it will do so in its notice to shareholders before the annual general meeting on April 29.

Were that the sum total of his challenge to the present board, it might be characterised as simply a move to improve the group’s financial performance and its return to shareholders. Much of what he says will, in fact, resonate with ordinary shareholders worried about the group’s financial performance and direction. It may well attract even more votes at the April AGM than he currently commands.

However, there is an enormous caveat hanging over any support for Grenon’s initiative.

He states categorically in his letter that he does not propose to act as a passive board chair (yes, there is an assumption that he will head an entirely new board). Instead, he leaves a strong impression he will be an executive chairman, in effect if not in name.

“I propose to be very active at the management level, leading a board and team that will delve into the operational details so as to be able to challenge management . . . This approach to governance is the only realistic way to ensure NZME gets a fresh set of eyes questioning every aspect of operational effectiveness and shareholder value creation.” The italics are mine and are highlighted for reasons I will return to shortly, but the import is clear: James Grenon and his team will have a finger in the pie.

The second reason for exercising caution on any endorsement of the Canadian’s move relates to the three paragraphs he groups under the heading “Journalism”.

On the surface, he promises better journalism, saying his intention is that “more quality content should be produced, not less”.

In contrast to NZME’s recent announcement to “set a new tone and build positive social momentum for New Zealanders”, our proposal will lift the company’s journalistic standards, resulting in the production of higher quality news content, characterised by independent, trustworthy and balanced perspectives. There will also be material for entertainment value as well. Then all the content will be used in any number of ways to generate profit.

He also applauds the “audience leading ratings of NZME’s audio segment”.

All of this sounds laudible, until one asks the simple question: How?

He has yet to give any specific answers. A request from the journalists’ union E Tū for assurances simply led to Grenon asking more questions about what the union meant by “editorial independence”.

However, let’s return to what Grenon means by his references to NZME’s journalism.

If he means the board will limit itself to supporting an annual budget that will allow NZME’s editors to independently produce the sort of content to which his letter alludes, all well and good.

If he means the aims set out in his letter will be transmitted to editors as an expectation of their approach to journalism, no problem.

However, when read in conjunction with the intentions I italicised above, there are strong indications that he intends to be at least meddlesome and, at worst, to dictate editorial direction and content. There is a signal to his editorial preferences in the fact that he applauds radio ratings that are firmly anchored by NewstalkZB’s right-leaning content.

Nowhere in Grenon’s letter is there any undertaking to observe the principles of editorial independence that certainly permeated The New Zealand Herald when I was editor a couple of decades ago and which I inherited from a long list of predecessors. Nowhere is there recognition that NZME has responsibilities to the general public. Declining trust is seen only in terms of the impact on profits.

Responsible and accountable journalism is something editors and their staff hold in trust on behalf of society. They seek audiences for the dual purposes of spreading that journalism to the general public and, in the process, producing the profits that ensure its ongoing sustainability. Done well, it is a virtuous circle.

However, like all circles, once any part of it is fractured it collapses. If Mr Grenon views the editorial department in the same way he sees every other aspect of NZME’s business, he would be in boots and all. Then it would be only a matter of time before the circle falls in on itself.

James Grenon’s bid deserves support only if he gives cast-iron guarantees of editorial independence, and that requires more than a letter of reassurance. Mere words are not enough.

Well-founded concerns for the future of a vital component of our journalistic infrastructure will be allayed only by changing the constitution of NZME to prevent directors from instructing any employee on editorial policy or operational matters. That protection would be all the more vital if now-stalled discussions over the purchase of Stuff’s titles and associated digital outlets are resumed after NZME’s board battle is resolved.

Both Television New Zealand and Radio New Zealand have statutory protection against ministerial interference in editorial matters. The community deserves the same protection from board interference in private sector media in the public interest.

That, however, has never been a given and many news media enterprises rely on a mixture of tradition and peer pressure to ensure their journalists are insulated from undue influence.

The New York Times, for example, has a proud tradition of editorial independence but that owes more to the Salzberger family than to the company’s articles of association. The Daily Mail and General Trust have a tradition whereby its editors are appointed by the editor-in-chief in consultation with the board chairman, who also by tradition has been Viscount Rothermere (currently the fourth holder of the title). Each editor then controls the content of the respective titles. The editor-in-chief of The Guardian is not appointed by the board but by the Scott Trust, which owns the newspaper group, and reports directly to it.

I commend to Grenon and his fellow board aspirants an essay on editorial independence by the chairman of the New York Times Company, A G Salzberger. You can access it here.

For NZME to have effective guarantees of editorial independence, its articles would need to have a failsafe mechanism to prevent the sort of override that Rupert Murdoch affected with his news acquisitions. Such a mechanism might be special recourse to the Media Council in the event of an attempt by directors to interfere. The council could then independently investigate whether there had been a breach of the company constitution. Disclosure of such a breach could be damaging to both directors and the company.

The combination of protective governance plus an independent review process would allay most of the fears generated by Grenon’s utterances and his past brief encounters with news media — a former shareholding in the right-wing aggregator site The Centrist, and financing of legal action against mainstream media.

NZME shareholders and the public of New Zealand should be very wary if no such undertakings are forthcoming.

• Disclosure: I was formerly a shareholder in the previous parent company of the group but do not currently hold shares in NZME.

Dr Gavin Ellis holds a PhD in political studies. He is a media consultant and researcher. A former editor-in-chief of The New Zealand Herald, he has a background in journalism and communications — covering both editorial and management roles — that spans more than half a century. Dr Ellis publishes the website knightlyviews.com where this commentary was first published and it is republished by Café Pacific with permission.

This article was first published on Café Pacific.

New Zealand-based Canadian billionaire James Grenon owes the people of this country an immediate explanation of his intentions regarding media conglomerate NZME. This cannot wait until a shareholders’ meeting at the end of April.

Is his investment in the owner of The New Zealand Herald and NewstalkZB nothing more than a money-making venture to realise the value of its real estate marketing subsidiary? Has he no more interest than putting his share of the proceeds from spinning off OneRoof into a concealed safe in his $15 million Takapuna mansion?

Or does he intent to leverage his 9.6 percent holding and the support of other investors to take over the board (if not the company) in order to dictate the editorial direction of the country’s largest newspaper and its number one commercial radio station?

Grenon has said little beyond the barest of announcements that have been released by the New Zealand Stock Exchange. While he must exercise care to avoid triggering statutory takeover obligations, he cannot simply treat NZME as another of the private equity projects that have made him very wealthy. He is dealing with an entity whose influence and obligations extend far beyond the crude world of finance.

While I do not presume for one moment that he reads this column each week, let me suspend disbelief for a moment and speak directly to him.

Come clean and tell the people of New Zealand what you are doing and, more importantly, why.

Over the past week there has been considerable speculation over the answers to those questions. Much of it has drawn on what little we know of James Grenon. And it is precious little beyond two facts.

Backed right-wing Centrist
The first is that he put money behind the launch of a right-wing New Zealand news aggregation website, The Centrist, although he apparently no longer has a financial interest in it.

The second fact is that he provided financial support for conservative activists taking legal action against New Zealand media.

When I contacted a well-connected friend in Canada to ask about Grenon the response was short: “Never heard of him . . . and there aren’t that many Canadian billionaires.”

In short, the man who potentially may hold sway over the board of one of our biggest media companies has a very low profile indeed. That is a luxury to which he can no longer lay claim.

It may be that his interest is, after all, a financial one based on his undoubted investment skills. He may see a lucrative opportunity in OneRoof. After all, Fairfax’s public listing and subsequent sale of its Australian equivalent, Domain, provided not only a useful cash boost for shareholders but the creation of a stand-alone entity that now has a market cap of about $A2.8 billion.

Perhaps he wants a board cleanout to guarantee a OneRoof float.

If so, say so.

Similar transactions
Although spinning off OneRoof could have dire consequences for the viability of what would be left of NZME, that is a decision no different to similar transactions made by many companies in the financial interests of shareholders.

There is a world of difference, however, between seizing an investment opportunity and seeking to secure influence by dictating the editorial direction of a significant portion of our news media.

If the speculation is correct — and the billionaire is seeking to steer NZME on an editorial course to the right — New Zealand has a problem.

Communications minister Paul Goldsmith gave a lamely neoliberal response reported by Stuff last week: He was “happy to take some advice” on the development, but NZME was a “private company” and ultimately it was up to its shareholders to determine how it operated.

Let me repeat my earlier point: NZME is an entity whose influence and obligations extend far beyond the crude world of finance (and the outworn concept that the market can rule). Its stewardship of the vehicles at the forefront of news dissemination and opinion formation means it must meet higher obligation than what we expect of an ordinary “private company”.

The most fundamental of those obligations is the independence of editorial decision-making and direction.

I became editor of The New Zealand Herald shortly after Wilson & Horton was sold to Irish businessman Tony O’Reilly. On my appointment the then chief executive of O’Reilly’s Independent News & Media, Liam Healy, said the board had only one editorial requirement of me: That I would not advocate the use of violence as a legitimate means to a political end.

Only direction echoed Mandela
Coming from a man who had witnessed the effects of such violence in Northern Ireland, I had no difficulty in acceding to his request. And throughout my entire editorship, the only “request” made of me by O’Reilly himself was that I would support the distribution of generic Aids drugs in Africa. It followed a meeting he had had with Nelson Mandela. I had no other direction from the board.

Yes, I had to bat away requests by management personnel (who should have known better) to “do this” or “not do that” but, without exception, the attempts were commercially driven — they did not want to upset advertisers. There was never a political or ideological motive behind them. Nor were such requests limited to me.

I doubt there is an editor in the country who has not had a manager asking for something to please an advertiser. Disappointment hasn’t deterred their trying.

In this column last week, I wrote of the dangers of a rich owner (in that case Washington Post owner Jeff Bezos) dictating editorial policy. The dangers if James Grenon has similar intentions would be even greater, given NZME’s share of the news market.

The journalists’ union, E tu, has already concluded that the Canadian’s intention is to gain right-wing influence. Its director, Michael Wood, issued a statement in which he said: “The idea that a shadowy cabal, backed by extreme wealth, is planning to take over such an important institution in our democratic fabric should be of concern to all New Zealanders.”

He called on the current NZME board to re-affirm a commitment to editorial independence.

Michael Wood reflects the fears that are rightly held by NZME’s journalists. They, too, will doubtless be looking for assurances of editorial independence.

‘Cast-iron’ guarantees?
Such assurances are vital, but those journalists should look back to some “cast-iron” guarantees given by other rich new owners if they are to avoid history repeating itself.

I investigated such guarantees in a book I wrote titled Trust Ownership and the Future of News: Media Moguls and White Knights. In it I noted that 20 years before Rupert Murdoch purchased The Times of London, there was a warning that the newspaper’s editor “far from having his independence guaranteed, is on paper entirely in the hands of the Chief Proprietors who are specifically empowered by the Articles of Association to control editorial policy”, although there was provision for a “committee of notables” to veto the transfer of shares into undesirable hands.

To satisfy the British government, Murdoch gave guarantees of editorial independence and a “court of appeal” role for independent directors. Neither proved worth the paper they were written on.

In contrast, the constitution of the company that owns The Economist does not permit any individual or organisation to gain a majority shareholding. The editor exercises independent editorial control and is appointed by trustees, who are independent of commercial, political and proprietorial influences.

There are no such protections in the constitution, board charter, or code of conduct and ethics governing NZME. And it is doubtful that any cast-iron guarantees could be inserted in advance of the company’s annual general meeting.

If James Grenon does, in fact, have designs on the editorial direction of NZME, it is difficult to see how he might be prevented from achieving his aim.

Statutory guarantees would be unprecedented and, in any case, sit well outside the mindset of a coalition government that has shown no inclination to intervene in a deteriorating media market. Nonetheless, Minister Goldsmith would be well advised to address the issue with a good deal more urgency.

He might, at the very least, press the Canadian billionaire on his intentions.

And if the coalition thinks a swing to the right in our news media would be no bad thing, it should be very careful what it wishes for.

If the Canadian’s intentions are as Michael Wood suspects, perhaps the only hope will lie with those shareholders who see that it will be in their own financial interests to ensure that, in aggregate, NZME’s news assets continue to steer a (relatively) middle course. For proof, they need look only at the declining subscriber base of The Washington Post.

Postscipt
On Wednesday, The New Zealand Herald stated James Grenon had provided further detail, of his intentions. It is clear that he does, in fact, intend to play a role in the editorial side of NZME.

Just how hands-on he would be remains to be seen. However, he told the Herald that, if successful in making it on to the NZME board, he expected an editorial board would be established “with representation from both sides of the spectrum”.

On the surface that looks reassuring but editorial boards elsewhere have also been used to serve the ends of a proprietor while giving the appearance of independence.

And just what role would an editorial board play? Would it determine the editorial direction that an editor would have to slavishly follow? Or would it be a shield protecting the editor’s independence?

Only time will tell.

Devil in the detail
Media Insider columnist Shayne Currie, writing in the Weekend Herald, stated that “the Herald’s dominance has come through once again in quarterly Nielsen readership results . . . ” That is perfectly true: The newspaper’s average issue readership is more than four times that of its closest competitor.

What the Insider did not say was that the Herald’s readership had declined by 32,000 over the past year — from 531,000 to 499,000 — and by 14,000 since the last quarterly survey.

The Waikato Times, The Post and the Otago Daily Times were relatively stable while The Press was down 11,000 year-on-year but only 1000 since the last survey.

In the weekend market, the Sunday Star Times was down 1000 readers year-on-year to stand at 180,000 and up slightly on the last survey. The Herald on Sunday was down 6000 year-on-year to sit at 302,000.

There was a little good news in the weekly magazine market. The New Zealand Listener has gained 5000 readers year-on-year and now has a readership of 207,000. In the monthly market, Mindfood increased its readership by 15,000 over the same period and now sits at 222,000.

The New Zealand Woman’s Weekly continues to dominate the women’s magazine market. It was slightly up on the last survey but well down year-on-year, dropping from 458,000 to 408,000. Woman’s Day had an even greater annual decline, falling from 380,000 to 317,000.

Article by AsiaPacificReport.nz

The Aotearoa New Zealand union representing many of NZME’s journalists says it is “deeply worried” by a billionaire’s plans to take over its board.

Auckland-based Canadian billionaire Jim Grenon is leading a move to dump the board of media company NZME, owners of The New Zealand Herald and NewsTalk ZB.

He has told the company’s board he wants to remove most of the current directors, replace them with himself and three others, and choose one existing director to stay on.

He took a nearly 10 percent stake in the business earlier in the week.

Michael Wood, negotiation specialist at E tū, the union that represents NZME’s journalists, said he had grave concerns.

“We see a pattern that has been incredibly unhealthy in other countries, of billionaire oligarchs moving into media ownership roles to be able to promote their own particular view of the word,” he said.

“Secondly, we have a situation here where when Mr Grenon purchased holdings in NZME he was at pains to make it sound like an innocent manoeuvre with no broader agenda . . .  within a few days he is aggressively pursuing board positions.”

What unsaid agendas?
Wood said Grenon had a track record of trying to influence media discourse in New Zealand.

“We are deeply concerned about this, about what unsaid agendas lie behind a billionaire oligarch trying to take ownership of one of our biggest media companies.”

“We are deeply concerned about this, about what unsaid agendas lie behind a billionaire oligarch trying to take ownership of one of our biggest media companies.”

He said it would be important for New Zealand not to follow the example of the US, where media outlets had become “the mouthpiece for the rich and powerful”.

E tū would consult its national delegate committee of journalists, he said.

Grenon has been linked with alternative news sites, including The Centrist, serving as the company’s director up to August 2023.

The Centrist claims to present under-served perspectives and reason-based analysis, “even if it might be too hot for the mainstream media to handle”.

Grenon has been approached for comment by RNZ.

Preoccupations with trans rights, treaty issues
Duncan Greive, founder of The Spinoff and media commentator, said he was a reader of Grenon’s site The Centrist.

“The main thing we know about him is that publication,” Greive said.

“It’s largely news aggregation but it has very specific preoccupations around trans rights, treaty issues and particularly vaccine injury and efficacy.

“A lot of the time it’s aggregating from mainstream news sites but there’s a definite feel that things are under-covered or under-emphasised at mainstream news organisations.

“If he is looking to gain greater control and exert influence on the publishing and editorial aspects of the business, you’ve got to think there is a belief that those things are under-covered and the editorial direction of The Herald isn’t what he would like it to be.”

Greive said the move could be connected to the NZME announcement in its annual results that it was exploring options for the sale of its real estate platform OneRoof.

“There are a lot of investors who believe OneRoof is being held back by proximity to the ‘legacy media’ assets of NZME and if it could be pulled out of there the two businesses would be more valuable separate than together.

“If you look at the shareholder book of NZME, you don’t image a lot of these institutional investors who hold the bulk of the shares are going to be as excited about editorial direction and issues as Grenon would be . . .  but they would be excited about the sale of OneRoof.”

Wanting the publishing side
Greive said he could imagine a scenario where Grenon told shareholders he wanted the publishing side, at a reduced value, and the OneRoof business could be separated off.

“From a pure value realisation, maximisation of shareholder value point of view, that makes sense to me.”

Greive said attention would now go on the 37 percent of shareholders whom Grenon said had been consulted in confidence about his plans.

“It will become clear pretty quickly and they will be under pressure to say why they are involved in this and it will become clear pretty quickly whether my theory is correct.”

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Media publisher NZME has come under fire for admitting it used artificial intelligence to create editorials that ran in the Weekend Herald and other publications, with a media commentator saying it “can only damage trust”.

RNZ’s Mediawatch revealed late yesterday that NZME had used AI to write an editorial about “Who the All Blacks should pick to play at centre” that ran first in the Weekend Herald on July 20 and another piece about MMA professional Israel Adesanya.

A statement from NZME editor-in-chief Murray Kirkness said AI was used in a way that fell short of its standards and “more journalistic rigour would have been beneficial”.

NZME’s standards don’t mandate disclosure but do say stories should be attributed to “the author and/or the creator/provider of the material” in accordance with the company’s Code of Ethics.

A co-author of the annual AUT Trust in News report, Dr Greg Treadwell, told Midday Report it was a poor experiment in AI use.

“I think New Zealanders have to be realistic about the fact AI is going to work its way into the production of news, but I think the Herald has kind of admitted this was a pretty poor experiment in it for a number of reasons, I think.”

Treadwell said the role of the editorial in any major news publication was to be an opinion leader.

‘Not world-shattering’
“I don’t know how many of your readers have actually gone back to have a look at the editorial that the Herald published, but it was sort of a generalist round-up of the arguments for and against Reiko Ioane at centre in the All Blacks back line — not a world-shattering issue, but a really good example of how AI doesn’t really, can’t really do what an editorial should do, which is to take a position on something.

“If you ask it to take a position, it will, and if you ask it to take another position, it will take that position.

“What is lacking here, even if you ask [AI] to take positions, is the original argument we would look to our senior journalists to put into the public domain for us about important issues.”

Public trust in the media was falling and media companies needed to reassure the public it could be trusted, he said.

“When the public hears that AI is being used in places — and perhaps most importantly here is that it wasn’t acknowledged that was being used to create this editorial — then that can only damage trust.

“I think there’s a lot of issues here including that AI can be incredibly useful for data analysis and other things in journalism, but we just have to be incredibly transparent about how we’re using it.”

‘Another world first’
Former Herald editor-in-chief and prominent media commentator Tim Murphy joked on social media the editorial may “have achieved another world first for NZ”.

On the upside, this has got to have achieved another world first for NZ https://t.co/e6UvHMRwXg

— Tim Murphy (@tmurphyNZ) July 31, 2024

The revelation was also panned by some competitor publications, with the National Business Review’s official X account noting that “NBR journalists are intelligent. Not artificial.”

NBR journalists are intelligent. Not artificial.
Just saying.https://t.co/aUJfld3taf

— NBR (@TheNBR) August 1, 2024

RNZ also approached New Zealand Rugby to ask their thoughts on NZME using AI to analyse the All Black team selection.

In a statement, NZR said it recognised the need for media organisations to have well-established editorial policies and standards.

“These ensure high quality sports journalism and play an important role in telling rugby’s stories.

“NZR is satisfied that the New Zealand Herald has made the appropriate steps to amend the story in question.”

“The Herald and other NZME publications use AI to improve our journalism. In some cases, we also create stories entirely using AI tools,” says an explanatory article headlined NZME, NZ Herald and our use of AI.

“We believe that smart use of AI allows us to publish better journalism. We remain committed to our Code of Ethics and to the integrity of our journalism, regardless of whether or not we use AI tools to help with the production or processing of articles.”

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Warner Bros Discovery will struggle to retain viewers in New Zealand if it has no news operation, Newshub journalist Paddy Gower predicts, as he continues his crusade for someone to save at least part of its newsroom.

A grim 48 hours for news media has resulted in many jobs being lost in the sector — as TV3 confirmed the closure of Newshub, and TVNZ announced it was going ahead with axing its current affairs flagship Sunday, consumer affairs Fair Go and two news bulletins.

About 250 jobs are being lost in the shutdown of Three’s national news service, which will close in July.

Gower told RNZ Morning Report Warner Bros Discovery needed to get on and do a deal for another party to take over the news bulletin.

He was among seven senior Newshub journalists who pushed back against the company’s proposal and put forward their own plan.

The proposal, led by his colleague Michael Morrah, was “radical”, “aggressive” and would have pared the news operation back to the bone, he said.

It centred on the 6pm bulletin which brought in a lot of advertising revenue, retain the website and would later build up the digital operation.

“Basically it was a cutdown radical proposal to hang on to the 6pm bulletin and find digital solutions out into the future.”

While management gave them access to figures and helped them in other ways they ultimately decided not to go ahead.

He said when the closure was confirmed, there was a feeling of “the weight of history” at the loss of a taonga which Kiwis would miss when it disappeared.

“It’s gonna be a dark time for news in this country,” he said.

Gower said Warner Bros Discovery would have “a helluva time” keeping viewers without Newshub providing news and current affairs.

“We tried. That’s the Kiwi way. That’s the Newshub way.”

He said another media company, such as Stuff or NZME, could now come in and further their own news brand and their reputation by saving part of a significant news operation.

They would oversee the making of a 6pm news bulletin that would be sold to Warner Bros Discovery and in the process be working with one of the world’s leading media companies.

“That has to be a possibility . . . They would be seen to be saving news in New Zealand and that’s a big ups for them . . .

“The company that is able to get that deal done …. is going to get some incredible journalists on board to help them do it,” Gower said.

It would probably save about 40 to 50 jobs, he said.

Warner Brothers Discovery declined to be interviewed by Morning Report.

Broadcasting Minister accused of lack of vision
Former head of news at TV3 Mark Jennings believed Broadcasting Minister Melissa Lee was “all at sea” as the country veered towards a media crisis.

He found her response to the Newshub closure confusing and did not believe the cabinet paper she has been working on would provide anything beneficial.

“I think you’re likely to have three parties, New Zealand First, ACT and National, all with different points of view and I can’t see them agreeing on any forward course of action, particularly not with Melissa Lee who appears to have no vision here at all.”

Jennings said he was notsurprised the Morrah-Gower plan did not succeed, because employers had considered other options and then made up their minds before the consultation period began.

If an offer from an outside organisation did get the go-ahead, it would be a “basic product” and would be “news-light”, he said.

It might be shot on i-Phones and edited by journalists and would not resemble Newshub’s current flagship bulletin.

While both the pandemic and social media had lowered the quality threshold of what viewers might accept, it would still be compared to what TVNZ was screening.

“The challenge will be for them to hold on to their ratings and more importantly, their share. Their share has been decreasing over time and if it gets too much lower, they’ll find themselves back at square one really.”

Minister Lee was unwilling to be interviewed by Morning Report.

On Wednesday, she refused to tell RNZ once again what her plans to reform the sector were, citing cabinet confidentiality.

She said she was focused on ensuring New Zealand’s media industry was sustainable and modernised, and she was looking at reviewing the Broadcasting Act.

Although she has written a cabinet paper, she would not say what was in it.

Lee said she had talked to international companies on how they could support and increase New Zealand screen production, but it would not include a quota.

She said it would not have helped the situation at Newshub.

Not much scope for NZ on Air
New Zealand on Air chief executive Cam Harland said the agency had a limited ability to intervene because its remit was to provide funding for a large number of audiences across a range of genres.

He heads the agency responsible for distributing public funds but its budget isn’t nearly enough to address shortfalls.

Daily television news was expensive to produce, so he considered it unlikely NZ on Air would help much, he told Morning Report.

The loss of jobs and talent was “monumental” and NZ on Air bosses intended to meet with TVNZ and Newshub as well as senior journalists, such as Jennings, to get more information before making any decisions.

“We absolutely want to help . . .  so I guess our view now is: Can we be more innovative with what we’re funding, can we get more bang for the buck?”

The organisation was also faced with reviewing its spending in line with the government’s requirements for the public sector.

Union files claim against TVNZ

The union representing journalists has filed a claim against TVNZ alleging the company breached its own consultation requirements in its job cuts process.

E Tu’s negotiation specialist, Michael Wood, said the broadcaster should have involved its employees before the proposal was presented.

Talks were continuing with the Employment Relations Authority to see if a legal case could be heard as quickly as possible.

“It’s an urgent matter now . . . We’ll be trying to get an outcome there as soon as possible and we want to see an outcome that respects the process.”

He said mediation between the parties might be a part of the process.

While the union and employees had a small victory with a handful of jobs being saved, there was still “a massive loss of capacity” with the axing of several programmes.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

The New Zealand Herald copped criticism for publishing a front-page attack ad targeting the National Party leader this week — but it was far from the first time ads like it have appeared in print.

Meanwhile, questions were asked about other coverage that looked like it might be taking sides as the official Aotearoa New Zealand election campaign period begins.

“You’ve got to survive in the media. You got to take the ads,” Newstalk ZB morning host Kerre Woodham told listeners last Monday, explaining the the controversial Council of Trade Union ad labelling the National Party leader Christopher Luxon “out of touch and too risky”.

“You’ve got to survive in the media. You got to take the ads,” Newstalk ZB morning host Kerre Woodham told listeners last Monday, explaining the the controversial Council of Trade Union ad labelling the National Party leader “out of touch and too risky”.

It was clearly an election advocacy ad — and it was identified as such in the Herald. But as soon as the ad came through the NZME ad department, the senior editors there must have known devoting the front page to it would become a news story.

The afternoon host at the Herald’s NZME stablemate NewstalkZB, Andrew Dickens, certainly thought so.

“I think this is news. This is why I’m talking about it on the radio. I’m not involved with this decision.  . . but I think they need to write about it and say how they actually determine who gets the ‘wraparound’,” he told his listeners.

Blue sticker ads
The Herald top brass wasn’t keen on that, but election ads on the front page aren’t entirely unprecedented.

A former Herald editor, Tim Murphy, pointed out the Weekend Herald has allowed the National Party to add detachable blue stickers late in previous campaigns.

And once papers opened the door to wraparound front-and-back page ads for retailers (who paid a pretty penny for them during the covid-19 crisis), it was only a matter of time before someone selling political messages rather than fridges took up the space as well.

The CTU ad was within the rules for political promotion by third parties. As long as they registered, they can spend the thick end of $400,000 on ads doing down political opponents if they want to.

Gordon Campbell on scoop.co.nz said that apart from the front-page spot, there was nothing really novel about an ad criticising a party leader who was actively campaigning as the embodiment of his party’s policies.

And while the CTU’s campaign also appeared on billboards and social media platforms the same day, it was its appearance on the front page of a paper obliged to cover the campaign fairly which raised eyebrows.

“This will probably backfire on the Herald,” Andrew Dicken told his listeners, at the same moment one texted in to say he had cancelled his subscription to the Herald because of it.

‘False’ ads not acceptable
Andrew Dickens told his listeners NZME radio stations had rules too — and could not accept ads that are “false, wrong, or lies or defamatory.”

Newstalk ZB found that out back in 2019, when it ran a political ad in which Auckland mayoral candidate John Tamihere said no suburb would escape Auckland Transport’s “crazy plan” to cut the speed limits on Auckland roads.

The Advertising Standards Authority said that claim was false and the campaign ad, which had run for two weeks, should be dropped.

NZME told the Authority it had presumed the client’s script and figures provided were correct.

“Our team has been reminded to be vigilant when accepting advocacy advertisements to avoid this from reoccurring,” NZME said.

In other words, they promised to do fact checks before cashing cheques from people peddling political propaganda at election time.

But at that time, the Weekend Herald had just published another controversial political ad all about Christopher Luxon.

The half page ad showed former Prime Minister John Key morphing into Christopher Luxon in the style of Dick Frizzell’s famous “From Mickey to tiki” illustration.

Luxon was not even a member of the National Party at that point, let alone a candidate, but the client for that ad turned out to be property tycoon Steven Brooks, who really wanted Luxon to be the next party leader.

His involvement should have been declared on the ad, which had the appearance of unauthorised party political advertising.

Ads they didn’t want

While that’s all history now, Newstalk ZB listeners on Monday were also phoning concerns about ads that the Herald wouldn’t print in the recent past.

They were part of a campaign from the lobby group Family First, which our three biggest newspaper publishers all declined to run.

Family First leader Bob McCoskrie has accused them of colluding to cancel the ad, which had the slogan: “What is a woman?” and the website address for a campaign declaring it was “time to push back” against gender self-identification.

MoCoskrie said the ad departments of each publisher initially accepted the ad but editors subsequently decided they weren’t fit to print.

But while the paper publishers exercised their right not to print the ads, they did go up on billboards in public.

Last month the Advertising Standards Authority complaints board upheld a complaint about them, ruling the ad was “misleading and not socially responsible,” but only because the identity of the advertiser — Family First — wasn’t sufficiently clear for an advocacy ad.

From today, September 10, until the day before the election we are in the official election period overseen by the Electoral Commission.

During this time special rules and a separate dedicated code of broadcasting practice apply to what are known as “election programmes”, defined as radio or TV advertisements by or for a party or candidate which encouraged voters to vote in particular ways or for particular parties or people.

Broadcasters and publishers will be paying extra attention to balance and fairness now, with the watchdogs running a fast-track process for complaints about seriously misleading claims and serious allegations.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

By Colin Peacock, RNZ Mediawatch presenter

There is mounting pressure on tech titans Google and Facebook to pay local news media to carry their news online.

Google has already done deals with some for its News Showcase, but other big names in news are still trying to get the platforms to pay — and the government is hinting it could force the issue soon.

“Are you putting the hard word on them to secure deals to pay for content? Are you going to legislate?” Newshub Nation host Simon Shepherd asked Willie Jackson last weekend, putting the hard word on the broadcasting and media minister.

“Are you putting the hard word on them to secure deals to pay for content? Are you going to legislate?” Newshub Nation host Simon Shepherd asked Willie Jackson a week ago, putting the hard word on the broadcasting and media minister.

“I’m trying really hard. I have said to them, [in] three months let’s see the deals in the marketplace,” the minister replied.

For years local news media have griped about getting very little from the platforms distributing their stuff to huge audiences  — and profiting from it.

The thing most likely to persuade the tech titans to pay local newsmakers is the likelihood of the government forcing the issue with legislation — and this was the first time that a government minister had set any kind of deadline publicly.

‘I want to see fairness’
“I want to see some fairness. I want to see all these Kiwi news organisations looked after . . and these big players have the funding and the resourcing to be able to do that,” Willie Jackson told Newshub Nation.

Some of the deals that have been done were revealed earlier this month when Google launched the local version of its News Showcase service, now available via Google’s websites and apps.

The first Kiwi outlets ever to get regular payments from Google for that include The New Zealand Herald’s owner NZME and its subscriber subsidiary BusinessDesk, RNZ, online sites Scoop and Newsroom and the Pacific Media Network. There is also a handful of local outlets too like Crux, which serves the Southern Lakes region, and Kapiti News.

“It’s part of our commitment to continuing to play a part in what we see as a very important shared responsibility to ensure the long term sustainability of public interest journalism in New Zealand,” Google’s local country representative Carolyn Rainsford told RNZ’s Gyles Beckford recently.

Broadcasting Minister Willie Jackson described that as “a good start, but not enough” — while the Spinoff’s founder Duncan Grieve was also underwhelmed.

He reckoned it was actually Willie Jackson that Google had in mind with the Showcase launch “to create a sense that Google is now a solid and public spirited ally to the news industry”.

For now, Google News Showcase is far from a comprehensive or compelling service for Kiwis. It offers nothing from our biggest national news producer Stuff or other big names in news like TVNZ and Newshub — or smaller outlets such Allied Press and The Spinoff.

Bargaining collectively
Several publishers — including Stuff — have banded together with the News Publishers Association to bargain collectively with Google and Meta (the parent company of Facebook).

Earlier this year the Commerce Commission gave them permission to negotiate a deal for a 10-year period.

So how’s that going?

“We can’t comment much on the status, but we are engaging with the NPA,” was all Google’s regional head of partnerships Shilpa Jhunjhunwala would tell RNZ earlier this month.

A recent report by the Judith Nielsen Institute estimate Google and Facebook paid Australian media companies about A$200m last year.

“Unfortunately an interview won’t be possible,” Google New Zealand told Mediawatch last week (without explaining why).

Instead they gave us a statement attributable to Caroline Rainsford, country director Google New Zealand:

“We are proud of the launch of Google News Showcase and continuing our conversations with other local news media businesses.”

“We can’t give you any kind of commercial numbers because they’re all commercial and in confidence,” Google’s regional head of partnerships Shilpa Jhunjhunwala told RNZ’s Gyles Beckford earlier this month.

When pressed, she said Google’s global commitment to News Showcase was $1 billion over three years.

“But beyond that, we’re not able to share anything specific to New Zealand,” she said.

Why is there no deal with other New Zealand news publishers yet?

‘No serious offers on table’
“Those negotiations are underway, but neither of those companies have put any serious offers on the table,” Stuff chief executive Sinead Boucher told Mediawatch.

She said the Australian deals were their benchmark.

“What we produce is very similar kind of content and we operate in very similar markets. We’d be looking for payments that equate to more like NZ$40 million to $50 million a year into the industry here,” she said.

“I think the government and Minister Jackson have made clear that the government expect fair deals to be done — and that they are prepared to legislate in the near term to ensure that happens,” she said.

“The only way to materially address this is to create an environment where we can negotiate fair commercial payment from these giant multinationals who have built their businesses entirely off content created by other people,” she said.

“You could think of any search term and put it into Google and look down the results and see that a new story created by somebody is part of the results. What we are focused on negotiating a commercial payment for that content in the same way that you would for any other product,” she said.

“If you invested in a car and someone started running it as a taxi, you would expect them to compensate you for that — not to build their own business without recognising your investment,” Boucher told Mediawatch.

“Our problem is that these platforms are very reluctant to come to the table and have a fair negotiation. That’s why the sort of legislation has been needed in Australia and other countries and also here in New Zealand,” she said.

The tale across the Tasman.

For more than a decade, he chaired the Australian Competition and Consumer Commission (ACCC) Australia’s competition regulator.

“It was fraught at times, but we presented the report to government in mid-2019 and they accepted the recommendation to have a News Media Bargaining Code six months later. It was legislated in February 2021. That’s pretty quick in terms of policy development in Australia,” Sims told Mediawatch.

“Google’s done a deal with essentially all media businesses. Meta has only done a deal with media businesses which that employ 85 percent of (Australia’s) journalists. It’s crucial that . . . it’s widely shared and you need legislation so that everybody has the ability to bargain.

“I know for a fact that the payments were well in excess of A$200 million — so NZ $40 million to $50 million sounds absolutely the right number to be spread across all media,” he said.

“Google and Meta were required to bargain with all eligible media businesses — and if they could not reach agreement, then arbitration would come into place. The threat of that evened up the bargaining power,” he said.

“The second component was that if Google and Meta did a deal with one media player, then they were required under law to do a deal with all media players. So their choice was either have no media content on their platform, or do deals,” he said.

“They chose to do deals with media companies because there’s value to them,” he said.

Arbitration threat needed
“I’m a bit concerned that in New Zealand you don’t have arbitration at the end of the negotiation period negotiations fail,” he said.

A Google officer once told me struggling news media pleading for “compensation” were like redundant drivers of horse-drawn carriages and rickshaws expecting today’s taxi drivers to pay them.

“No, that’s completely wrong. This is not like the car taking the place of the horse and carriage or smartphones taking the place of Kodak film because Google and Facebook don’t produce any journalism. So they haven’t taken the place of media, because they’re just not in the media business,” Rod Sims told Mediawatch.

“For Google to be a good search engine, it needs to bring in media into its search just about every time. But they don’t need any particular media company. So only by the News Media Bargaining Code could you even up the bargaining power,” he said.

“Unless we get payment for media that’s being taken and used for free, we’ll have a lot less media and less media harms society,” he said.

“It’s not up to me to tell the New Zealand government what to do, but my advice would be to pass the Australian News Media Bargaining Code,” he said.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Stuff chief executive Sinead Boucher has purchased Stuff from its Australian owners Nine Entertainment for $1 to return the media company to New Zealand ownership.

The sale is expected to be completed by May 31.

“Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders,” Boucher said in a statement.

READ MORE: Court reveals new possible Stuff buyer in NZ media crisis

“Local ownership will bring many benefits to our staff, our customers and indeed to all Kiwis, as we take advantage of opportunities to invest in and grow the business.”

Nine will retain ownership of Stuff’s Petone printing plant site and lease it back to the media company. And Stuff will receive a percentage of the proceeds of its sale of Stuff Fibre to Vocus.

“As a result of the successful completion of the Stuff Fibre sale on 20 May 2020, Nine will receive 25 percent of those proceeds before completion of the Stuff sale, plus up to a further 75 percent over the subsequent 36 months, depending on the Stuff business’ ability to raise funding,” Nine said in a statement to the Australian stock exchange.

NZME had entered negotiations with Stuff’s owner on 23 April and earlier earlier this month announced it wanted to buy Stuff for $1 and asking for urgent government legislation allowing it to skirt the need for Commerce Commission approval.

Merger attempts knocked back
The owner of the Herald and Newstalk ZB had been trying to acquire Stuff since 2016, with its merger attempts knocked back by the Commission and the Court of Appeal.

Nine Entertainment insisted deal had been agreed and negotiations with NZME were already over, and the spat ended up in the High Court with NZME denied an injunction against the Nine.

Stuff journalists reacted positively to the news with one saying it’s the “best possible outcome” for the company, though several said they were under no illusions about the financial challenges facing the business, Mediawatch reported.

Employees were last month asked to take a 12-week pay cut because of the impact of the Covid-19 crisis.

“We have always said that we believe that it was important for Stuff to have local ownership and it is our firm view that this is the best outcome for competition and consumers in New Zealand,” Nine chief executive Hugh Marks said.

• This article is republished by the Pacific Media Centre under a partnership agreement with RNZ.
• If you have symptoms of the coronavirus, call the NZ Covid-19 Healthline on 0800 358 5453 (+64 9 358 5453 for international SIMs) or call your GP – don’t show up at a medical centre.
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Article by AsiaPacificReport.nz

A High Court judgment has revealed that an entity other than New Zealand Herald owner NZME is interested in buying the country’s biggest news publisher Stuff – and a deal could be done by the end of this month.

Stuff’s owner – Nine Entertainment in Australia – abandoned its negotiations with NZME after getting another offer from a prospective buyer, the judgment from Justice Sarah Katz revealed this week.

But the identity of the prospective owner is still under wraps.

READ MORE: A NZ without journalists: The implications of the combustion of our biggest news groups – James Hollings

NZME went to court last week seeking an injunction to prevent Nine Entertainment bargaining with any other buyer. It argued Stuff’s owner had breached the 14-day exclusive negotiation agreement it entered into with NZME on April 23.

Earlier it had announced it wanted to buy Stuff for $1 and asked the government to pass legislation expediting the deal, allowing it to skirt the need for Commerce Commission approval.

Nine Entertainment insisted no such deal had been agreed and negotiations with NZME were already over.

In court, Nine Entertainment’s lawyer accused NZME of damaging Stuff with its actions.

Commerce Commission permission not needed
Nine Entertainment said the alternative offer wouldn’t require permission from the Commerce Commission. It is now planning to complete the sale with the prospective third-party buyer on May 31.

So far NBR owner Todd Scott – who recently completed a buyout of the publication which began in 2012 – is the only person to publicly express interest in buying the business.

“We are very serious about taking over the liabilities of Stuff NZ,” he said in an online post earlier this month.

He said the Commerce Commission, the Minister of Broadcasting and the opposition Broadcasting spokesperson had been informed of his plan.

On Wedesday, he described Nine’s move as “logical” on Twitter and shared a link to an under-construction website combining the names of two Stuff newspapers – DominionPress.co.nz

Scott has named Australian private equity firm Anacacia Capital as a backer. Last week the firm refused to confirm to RNZ if it had an interest in a deal for Stuff.

In the judgment outlining her reason for declining NZME’s application for an injunction against Nine Entertainment, Justice Sarah Katz said on the face of it, there was a legitimate argument that Nine Entertainment breached the conditions of its exclusive negotiations period with NZME.

Unlikely Nine would accept NZME offer
But she concluded that the potential cost to Nine Entertainment of forcing it back into exclusive negotiations outweighed the price NZME would have to pay if she refused an injunction.

It was unlikely Nine Entertainment would accept NZME’s offer even if she forced it back to the bargaining table, because it didn’t want to accept a deal that would require Commerce Commission approval. Katz pointed to the fact that the government had already signaled it wouldn’t pass special legislation to allow the NZME-Stuff merger.

Meanwhile, Nine Entertainment’s separate deal with a third party might fall through if it had to resume negotiations with NZME, the decision said. Justice Katz noted that would also essentially force Nine to open its books to a competitor, despite having no intention of selling Stuff to that business.

Article by AsiaPacificReport.nz

Was New Zealand media giants NZME trying to pull a “fast one” when the company sought urgent approval to help to buy out rival media company Stuff for $1.

The New Zealand Herald owners filed an urgent Commerce Commission application at on Monday for the purchase – for $1 – and wanted to have the transaction complete by May 31.

In a who-will-blink-first move, it was seeking the government’s help with urgent legislation to help clear the way for the application.

READ MORE: NZME forces media merger issue – Colin Peacock, Mediawatch

The company revealed in a market announcement to the New Zealand Stock Exchange (NZX) that it had entered an exclusive negotiation period with Stuff’s owner, Australian-based Nine Entertainment, on April 23.

However, Nine have said it “terminated” negotiations without a satisfactory conclusion.

As Andrew Holden, a journalist for more than 30 years, including five as editor of the Christchurch daily newspaper The Press, and four as editor-in-chief of The Age in Melbourne, told RNZ’s Nine-to-Noon programme yesterday:

“How strange it is, as Alice in Wonderland would say, it has become curiouser and curiouser.”

“At 9.34am, the New Zealand Herald website announcing precisely that, NZME has gone to the government and that it sought special legislation so it could circumvent the Commerce Commission and allow it to go ahead with the purchase,” the media commentator said.

“Pretty quickly Sinead Boucher, the CEO for Stuff comes back, and says the announcement was surprising to both to Nine and ourselves and not sure why NZME took this step given the clear message from our owners that there will be no transaction.

“That became more brutal when Nine entertainment issued its own statement to the Australian Stock Exchange saying not only that, but it had terminated further engagement with NZME,” he said.

Exclusive period
That forced NZME to issue another statement to the NZX saying as far as it was concerned it had an exclusive negotiation period with Nine and that had not finished.

“Further to that, we’ve had the regulator for the NZX asking some questions of NZME as to why their initial statement at 9.31am hadn’t mentioned the fact that talks had broken down, so there may be some further consequences,” Holden said.

“So basically, they are in a fundamental standoff and some of the commentators saying it was an attempt to bully the government,” he said.

“It leaves us in a very murky situation.”

There were also suggestions that a private equity firm in Australia were interested in Stuff, as was National Business Review owner Todd Scott.

With a day until the budget, and the government having already announced a $50 million first tranche of support for media, the question is whether NZME were already aware of what is in the budget?

Not so, said Dr Gavin Ellis, a former editor of The New Zealand and media commentator. He had a different take on what had taken place.

Budget process
“The budget process is such that it is not flexible enough to entertain 11th hour and 59th minute alterations,” Dr Ellis said.

“It is a bit puzzling I have to say,” he said of the whole process.

“The only development I’ve seen yesterday was a piece in The Australian about a medium sized private equity company having been in talks with Nine, apparently in conjunction with Todd Scott (NBR) but whether that was part of the ongoing discussion they had with a large number of people over a period of time with the possible sale of Stuff, I don’t know,” Dr Ellis told Pacific Media Watch.

His take was that there was a misunderstanding between the two parties.

“It seems to me that, both NZME and Nine, having made statements to their relative stock exchanges, that this appears to me not a matter of gamesmanship, so much as fundamental misunderstanding between the parties,” he said.

“They would not have made statements to the stock exchanges unless they believed it to be to current position because the consequences of misinforming the stock exchange are onerous.

“Particularly given that NZME share price rose yesterday,” Dr Ellis said.

‘Believed negotiations live’
“They must have believed the negotiations were live and that they were enlisting the aid of the Commerce Commission and potentially the government to ease the way for that sale to take place.

“The only unknown element is the role of Commerce Commission and the government, it is conceivable, and we’re privy to the financial details of Stuff or the liabilities that NZME would take on, but it is possible that if the government or the commerce commission were minded to facilitate a merger that they may put in place a number of binding conditions,” he said.

Meanwhile, Patrick Smellie of BusinessDesk in his column said: “Nine is ready to close Stuff down by May 31.

“It hasn’t said that publicly but BusinessDesk reliably understands that Nine has delivered that stark message to government ministers and officials,” he said.

“If Stuff were to close or were perhaps placed in receivership or liquidation next month, that could be the end not only for the country’s most-trafficked news website, but also a string of regional newspaper titles that are household names.”

That includes Wellington’s Dominion Post, Christchurch’s The Press, Hamilton’s Waikato Times, the Taranaki Daily News, the Timaru Herald, the Southland Times, and the Nelson Mail.

Article by AsiaPacificReport.nz

By RNZ News

NZME is insisting a deal for it to purchase media rival Stuff is still on the cards, despite Stuff’s owner saying it has wrapped up talks with no deal.

Stuff and NZME are seeking leave to appeal the High Court decision blocking their merger.

NZME said today it was asking the government to allow it to buy Stuff for a nominal $1.

READ MORE: NZME seeks urgent approval … to help ‘save jobs, newspapers’

Stuff’s owner, Australia’s Nine Entertainment, responded that it had terminated talks with NZME over a purchase plan last week and no deal was in place.

In the latest twist, NZME has since told the NZX that it believed it was still in a “binding exclusive negotiation period with Nine and does not accept that exclusivity has been validly terminated.”

Stuff chief executive Sinead Boucher told staff this morning the announcement by NZME came as a surprise.

“There is no deal between NZME and Nine.

Clear no transaction message
“We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction.”

She said she would get more information and share it during the day.

In its initial announcement this morning, NZME said it was seeking Commerce Commission approval and special legislation from the government by the end of the month to purchase Stuff.

The commission has previously declined clearance for a merger of the two companies, saying it would substantially lessen competition, both for advertisers and readers. That decision was subsequently upheld by the High Court and the Court of Appeal.

NZME said in this morning’s market announcement the acquisition of Stuff would lower the costs of producing news, and ensure a committed local news media outlet into the future.

NZME believed the New Zealand media sector was too small for the current number of quality participants, the statement said.

“Consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions.

NZME thinks it is ‘best owner’
“NZME continues to believe that it is the best owner for Stuff as it is best placed to preserve mastheads, newsrooms and jobs. NZME considers that in the current New Zealand media landscape, NZME’s acquisition of Stuff will not substantially lessen competition in any market.”

Last month NZME, which owns The New Zealand Herald, regional papers and radio stations including Newstalk ZB, announced 200 jobs would go due to sliding advertising revenue amid the covid-19 downturn. It also asked the remaining staff to take a 15 percent pay cut for the next three months.

Stuff also asked its employees to take a pay cut. Stuff staff earning more than $50,000 were asked to take a 15 percent reduction, the executive team 25 percent, and chief executive Sinead Boucher cut her salary by 40 percent.

Stuff was bought by Australian-listed media group Nine Entertainment in late 2018 but has been on the sale block for months.

In November last year NZME confirmed it had been in talks with Nine about a possible purchase and had put a proposal to the government regarding a possible transaction including a “ringfence” agreement for Stuff’s editorial operations.

Between them, NZME and Stuff own most of New Zealand’s newspapers.

Article by AsiaPacificReport.nz

By Sri Krishnamurthi, contributing editor of Pacific Media Watch

The thin veneer of a seemingly robust New Zealand media was ripped off like a plaster on a scab in front of Parliament’s Epidemic Response Committee today exposing its frailties. 

The heads of all New Zealand’s media companies appeared via Zoom and all spoke of the desperate times ahead. 

Stuff, NZME, Television New Zealand, MediaWorks, RNZ, Newsroom, The Spinoff and Businessdesk as well as iwi representation appeared before the Epidemic Response Committee, which is chaired by opposition National Party leader Simon Bridges. 

READ MORE: Media rescue package needed to save industry ‘on its knees’

What was unusual was that all reported that their audience and readership numbers were “skyrocketing” because people needed factual news, whether it was digital readership, broadcast or television. 

However, advertising revenue was at a nadir and that is what was hurting the media owners. 

Former New Zealand Herald editor and media commentator Dr Gavin Ellis in his opening submission said advertising revenue for media companies was estimated to drop between 50 and 75 percent, and there was concern that it would not return even after the Covid-19 pandemic crisis was over. 

“Magazine publishers are indispensable gurus of our unique culture and our habitat, they’ve got to be urgently granted as an essential business status,” he said. 

Media environment plight
“One media representative described the plight of the media environment as it needed an emergency triage and I think that’s right. 

“The government really needs to adopt a three-stage process to deal with the media systems,” he said. 

“The most immediate need is to help them recover some of that cashflow through diverting already committed government enterprise spend for example suspending regulatory and transmission costs for broadcasters, there is a large number of things that can be done. 

“In terms of magazines, just let them publish, post-lockdown government needs to fast-track media restructuring or buying media to find long term solutions and really fast-tracking, sidestepping the Commerce Commission and the process that exist even for distressed businesses,” he added. 

 He backed the proposed merger of Stuff and NZME to buy them some time. 

“There is a number of ways the government can make these businesses more attractive by changing the tax status,” Dr Ellis said. 

“And finally stage three is the post Covid-19 reconstruction, it needs a total rethink redefining the media ecosystem and replacing outmoded ownership structures with a more sustainable model.” 

More redundancies feared
He added that he feared the redundancies at Bauer and NZME would not be the end of it. 

“The elephant in the room is the social media companies, Google, Facebook, syphoning money off media companies,” he said. 

“The bottom line is there will be contractions.

“I am fearful if the financial standing of the owners of MediaWorks and Stuff decline sufficiently they may be minded to follow Bauer and simply close New Zealand operations,” he sounded a warning. 

In response, the Minister for Broadcasting, Communications and Digital Media, Kris Faafoi, said “the government is developing a short-and-long-term package for support to the media industry to deal with the challenges they identified. 

“I’ll be able to hopefully announce those next week but the Prime Minister, Jacinda Ardern, said the first tranche of support for struggling media companies would be announced next week. 

At the same time, she defended advertising on social media, saying that’s where New Zealanders were. 

Nervous times

Next up at the Committee hearing was Sinead Boucher, the CEO of Stuff, who admitted the company, with the largest website, faced nervous times. 

She said ongoing government support was necessary – either through New Zealand on Air or through other mechanisms – because advertising revenue has “dropped off a cliff”, more than halving in the weeks since March and looking “particularly dire” for April. 

Like all those who appeared, she said the government should shift its advertising from social media giants like Facebook and Google to New Zealand media companies, and also consider special tax breaks. 

Shayne Currie, managing editor of NZME, again pressed for being allowed to purchase Stuff, something which the Commerce Commission has rejected previously. 

“We believe there is a sustainable model there and at the same time it will allow us to be equally strong,” Currie said. 

“I like the moves that just have been announced in France – and France is the first major country which has moved in this direction – and I think Australia will follow very quickly. 

“Last week, it was announced that France has ordered Google, and targeting Google in the first instance, they now need to start negotiating with media companies to pay them for the content that appears on their search engines. 

Moving ahead
“That is a really significant move and I think the Australian Competition and Consumer Commission (ACCC) is certainly making similar recommendations along those lines. 

“They are moving ahead this year and it can’t come soon enough in New Zealand,” he said. 

As Kevin Kenrick, the TVNZ CEO, pointed out: “I will just reinforce every dollar the government spends on Google and Facebook is a dollar that is not spent supporting local media by New Zealand.” 

Michael Anderson, who said several people at Mediaworks had been tested for Covid-19, said the difference between TV3 and TVNZ was that TV3 had debts that they had to pay back. 

Meanwhile, in Australia the announcement of almost A$100 million in federal funding and support for regional newspapers and broadcasting during the coronavirus crisis is welcome but a long-term plan is needed to ensure the sector’s future, says the union for Australia’s media workers. 

The Media, Entertainment & Arts Alliance (MEAA) welcomes the belated support for regional media in the form of a $50 million Public Interest News Gathering programme and tax relief for commercial TV and radio.  

This comes after the closure of more than a dozen publications around the country due to reduced advertising revenue due to the pandemic, the statement read. 

MPs ‘understand what is at stake’
It prompted the Journalism Education Association of New Zealand (JEANZ) president Greg Treadwell to say: “The Australian government has moved to help the news media and I expect the NZ government to do the same.  

“It was clear, I thought, during the media company representations to the pandemic committee today that MPs understood the importance of what was at stake. That was something of a relief, to be honest. 

“Media bosses, too, seemed to understand their long-running struggle for financial security has just changed fundamentally in nature. In the background was some of the regular positioning we’ve seen from the various players over recent years – for example, Mediaworks’ resentment that a state-owned company, TVNZ, eats up much of the commercial advertising dollar.  

“But in the foreground was the urgent need to create enough security to enable the serious job of public communications to be done well. After all, these politicians will need the media with an election looming,” he added. 

He said he thought that the NZME-Stuff merger was probably “on again” because there was “little chance of both thriving now, if there ever was”.

The committee appeared “pretty keen” on the idea that there was “no possibility of a plurality of voices if there was not first economic sustainability in a market model”.

“In other words, actually existing diversity is, in the end, treated as a nice-to-have,” Dr Treadwell said. 

“I think one of the main messages today was that the market shouldn’t be killed off in an attempt to save it.  

“The work done on developing new models like The Spinoff, Newsroom and BusinessDesk, should not be lost in the rescue.”

Appearing before the committee today were: media commentator Dr Gavin Ellis; CEO of Stuff Sinead Boucher; managing editor of NZME Shayne Currie, CEO of TVNZ Kevin Kenrick; CEO of Mediaworks Michael Anderson; RNZ CEO Paul Thompson CEO; co-editor of Newsroom Mark Jennings, managing editor of Spinoff Duncan Grieve; co-founder of BusinessDesk Patrick Smellie; and Peter Lucas-Jones representing iwi broadcasters. 

Article by AsiaPacificReport.nz