Sky TV has agreed to fully acquire TV3 owner Discovery New Zealand for $1.

Discovery NZ is a part of US media giant Warner Bros Discovery, and operates channel Three and online streaming platform ThreeNow.

NZX-listed Sky said the deal would be completed on a cash-free, debt-free basis, with completion expected on August 1.

Sky expected the deal to deliver revenue diversification and uplift of around $95 million a year.

Sky expected Discovery NZ’s operations to deliver sustainable underlying earnings growth of at least $10 million from the 2028 financial year.

Sky chief executive Sophie Moloney said it was a compelling opportunity for the company, with net integration costs of about $6.5 million.

“This is a compelling opportunity for Sky that directly supports our ambition to be Aotearoa New Zealand’s most engaging and essential media company,” she said.

Confidential advance notice
Sky said it gave the Commerce Commission confidential advance notice of the transaction, and the commission did not intend to consider the acquisition further.

Warner Bros Discovery Australia and NZ managing director Michael Brooks said it was a “fantastic outcome” for both companies.

“The continued challenges faced by the New Zealand media industry are well documented, and over the past 12 months, the Discovery NZ team has worked to deliver a new, more sustainable business model following a significant restructure in 2024,” Brooks said.

“While this business is not commercially viable as a standalone asset in WBD’s New Zealand portfolio, we see the value Three and ThreeNow can bring to Sky’s existing offering of complementary assets.”

Sky said on completion, Discovery NZ’s balance sheet would be clear of some long-term obligations, including property leases and content commitments, and would include assets such as the ThreeNow platform.

Sky said irrespective of the transaction, the company was confident of achieving its 30 cents a share dividend target for 2026.

‘Massive change’ for NZ media – ThreeNews to continue
Founder of The Spinoff and media commentator Duncan Greive said the deal would give Sky more reach and was a “massive change” in New Zealand’s media landscape.

He noted Sky’s existing free-to-air presence via Sky Open (formerly Prime), but said acquiring Three gave it the second-most popular audience outlet on TV.

“Because of the inertia of how people use television, Three is just a much more accessible channel and one that’s been around longer,” Greive said.

“To have basically the second-most popular channel in the country as part of their stable just means they’ve got a lot more ad inventory, much bigger audiences.”

It also gave Sky another outlet for their content, and would allow it to compete further against TVNZ, both linear and online, Greive said.

He said there may be a question mark around the long-term future of Three’s news service, which was produced by Stuff.

No reference to ThreeNews
Sky made no reference to ThreeNews in its announcement. However, Stuff confirmed ThreeNews would continue for now.

“Stuff’s delivery of ThreeNews is part of the deal but there are also now lots of new opportunities ahead that we are excited to explore together,” Stuff owner Sinead Boucher said in a statement.

On the deal itself, Boucher said she was “delighted” to see Three back in New Zealand ownership under Sky.

“And who doesn’t love a $1 deal!” Boucher said, referring to her own $1 deal to buy Stuff from Australia’s Nine Entertainment in 2020.

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

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

This week, Minister of Racing Winston Peters announced the end of greyhound racing in the interests of animal welfare.

Soon after, a law to criminalise killing of redundant racing dogs was passed under urgency in Parliament.

The next day, the minister introduced the Racing Industry Amendment Bill to preserve the TAB’s lucrative monopoly on sports betting which provides 90 percent of the racing industry’s revenue.

“Offshore operators are consolidating a significant market share of New Zealand betting — and the revenue which New Zealand’s racing industry relies on is certainly not guaranteed,” Peters told Parliament in support of the Bill.

But offshore tech companies have also been pulling the revenue rug out from under local news media companies for years, and there has been no such speedy response to that.

Digital platforms offer cheap and easy access to unlimited overseas content — and tech companies’ dominance of the digital advertising systems and the resulting revenue is intensifying.

Profits from online ads shown to New Zealanders go offshore — and very little tax is paid on the money made here by the likes of Google and Facebook.

On Tuesday, Media Minister Paul Goldsmith did introduce legislation to repeal advertising restrictions for broadcasters on Sundays and public holidays.

“As the government we must ensure regulatory settings are enabling the best chance of success,” he said in a statement.

The media have been crying out for this low-hanging fruit for years — but the estimated $6 million boost is a drop in the bucket for broadcasters, and little help for other media.

The big bucks are in tech platforms paying for the local news they carry.

Squeezing the tech titans
In Australia, the government did it three years ago with a bargaining code that is funnelling significant sums to news media there. It also signalled the willingness of successive governments to confront the market dominance of ‘big tech’.

When Goldsmith took over here in May he said the media industry’s problems were both urgent and acute – likewise the need to “level the playing field”.

The government then picked up the former government’s Fair Digital News Bargaining Bill, modelled on Australia’s move.

But it languishes low down on Parliament’s order paper, following threats from Google to cut news out of its platforms in New Zealand – or even cut and run from New Zealand altogether.

Six years after his Labour predecessor Kris Faafoi first pledged to follow in Australia’s footsteps in support of local media, Goldsmith said this week he now wants to wait and see how Australia’s latest tough measures pan out.

(The News Bargaining Incentive announced on Thursday could allow the Australian government to tax big digital platforms if they do not pay local news publishers there)

Meanwhile, news media cuts and closures here roll on.

The lid keeps sinking in 2024

“I’ve worked in the industry for 30 years and never seen a year like it,” RNZ’s Guyon Espiner wrote in The Listener this week, admitting to “a sense of survivor’s guilt”.

Just this month, 14 NZME local papers will close and more TVNZ news employees will be told they will lose jobs in what Espiner described as “destroy the village to save the village” strategy.

Whakaata Māori announced 27 job losses earlier this month and the end of Te Ao Māori News every weekday on TV. Its te reo channel will go online-only.

Digital start-ups with lower overheads than established news publishers and broadcasters are now struggling too.

“The Spinoff had just celebrated its 10th birthday when a fiscal hole opened up. Staff numbers are being culled, projects put on ice and a mayday was sent out calling for donations to keep the site afloat,” Espiner also wrote in his bleak survey for The Listener.

Spinoff founder Duncan Grieve has charted the economic erosion of the media all year at The Spinoff and on its weekly podcast The Fold.

In a recent edition, he said he could not carry on “pretending things would be fine” and did not want The Spinoff to go down without giving people the chance to save it.

“We get some (revenue) direct from our audience through members, some commercial revenue and we get funding for various New Zealand on Air projects typically,” Greive told RNZ Mediawatch this week.

“The members’ bucket is pretty solid. The commercial bucket was going quite well, and then we just ran into a brick wall. There has been a real system-wide shock to commercial revenues.

“But the thing that we didn’t predict which caused us to have to publish that open letter was New Zealand on Air. We’ve been able to rely on getting one or two projects up, but we’ve missed out two rounds in a row. Maybe our projects . . .  weren’t good enough, but it certainly had this immediate, near-existential challenge for us.”

Critics complained The Spinoff has had millions of dollars in public money in its first decade.

“While the state is under no obligation to fund our work, it’s hard to watch as other platforms continue to be heavily backed while your own funding stops dead,” Greive said in the open letter.

The open letter said Creative NZ funding had been halved this year, and the Public Interest Journalism Fund support for two of The Spinoff’s team of 31 was due to run out next year.

“I absolutely take on the chin the idea that we shouldn’t be reliant on that funding. Once you experience something year after year, you do build your business around that . . .  for the coming year. When a hard-to-predict event like that comes along, you are in a situation where you have to scramble,” Grieve told Mediawatch.

“We shot a flare up that our audience has responded to. We’re not out of the woods yet, but we’re really pleased with the strength of support and an influx of members.”

He was the CEO of Warner Brothers Discovery NZ and oversaw the biggest and most comprehensive news closure of the year — the culling of the entire Newshub operation.

“It was heart-wrenching because we had looked at and tried everything leading into that announcement. I go back to July 2022, when we started to see money coming out of the market and the cost of living crisis starting to appear,” Kyne told Mediawatch this week.

“We started taking steps immediately and were incredibly prudent with cost management. We would get to a point where we felt reasonably confident that we had a path, but the floor beneath our feet — in terms of the commercial market — kept falling. You’re seeing this with TVNZ right now.”

Warner Brothers Discovery is a multinational player in broadcast media. Did they respond to requests for help?

“They were empathetic. But Warner Brothers Discovery had lost 60-70 percent of its share price because of the issues around global media companies as well. They were very determined that we got the company to a position of profitability as quickly as we possibly could. But ultimately the economics were such that we had to make the decision.”

Smaller but sustainable in 2025? Or managed decline?

Kyne did a deal with Stuff to supply a 6pm news bulletin to TV channel Three after the demise of Newshub in July.

He is one of a handful of people who know the sums, but Stuff is certainly producing ThreeNews now with a fraction of the former budget for Newshub.

Can media outlets settle on a shape that will be sustainable, but smaller — and carry on in 2025 and beyond? Or does Kyne fear media are merely managing decline if revenue continues to slump?

“It’s slightly terrifying because the downward pressures are going to continue into next year. Three created a sustainable model for the 6pm bulletin to continue.

“Stuff is an enormous newsgathering organisation, so they were able to make it work and good luck to them. I can see that bulletin continuing to improve as the team get more experience.”

No news is really bad news
If news can’t be sustained at scale in commercial media companies even on reduced budgets, what then?

Some are already pondering a “post-journalism” future in which social media takes over as the memes of sharing news and information.

How would that pan out?

“We might be about to find out,” Greive told Mediawatch.

“Journalism doesn’t have a monopoly on information, and there are all kinds of different institutions that now have channels. A lot of what is created . . .  has a factual basis. Whether it’s a TikTok-er or a YouTuber, they are themselves consumers of news.

“A lot of people are replacing a habit of reading the newspaper and listening to ZB or RNZ with a new habit — consuming social media. Some of it has a news-like quality but it doesn’t have vetting of the information and membership of the Media Council . . .  as a way of restraining behaviour.

“We’ve got a big question facing us as a society. Either news becomes this esoteric, elite habit that is either pay-walled or alternatively there’s public media. If we [lose] freely-accessible, mass-audience channels, then we’ll find out what democracy, the business sector, the cultural sector looks like without that.

“In communities where there isn’t a single journalist, a story can break or someone can put something out . . .  and if there’s no restraint on that and no check on it, things are going to happen.

“In other countries, most notably Australia, they’ve recognised this looming problem, and there’s a quite muscular and joined-up regulator and legislator to wrestle with the challenges that represents. And we’re just not seeing that here.”

They are in Australia.

In addition to the News Bargaining Code and the just-signalled News Bargaining Incentive, the Albanese government is banning social media for under-16s. Meta has responded to pressure to combat financial scam advertising on Facebook.

Here, the media policy paralysis makes the government’s ferries plan look decisive. What should it do in 2025?

To-do in 2025
“There are fairly obvious things that could be done that are being done in other jurisdictions, even if it’s as simple as having a system of fines and giving the Commerce Commission the power to sort of scrutinise large technology platforms,” Greive told Mediawatch.

“You’ve got this general sense of malaise over the country and a government that’s looking for a narrative. It’s shocking when you see Australia, where it’s arguably the biggest political story — but here we’re just doing nothing.”

Not quite. There was the holiday ad reform legislation this week.

“Allowing broadcasting Christmas Day and Easter is a drop in the ocean that’s not going to materially change the outcome for any company here,” Kyne told Mediawatch.

“The Fair Digital News Bargaining bill was conceived three years ago and the world has changed immeasurably.

“You’ve seen Australia also put some really thoughtful white papers together on media regulation that really does bring a level of equality between the global platforms and the local media and to have them regulated under common legislation — a bit like an Ofcom operates in the UK, where both publishers and platforms, together are overseen and managed accordingly.

“That’s the type of thing we’re desperate for in New Zealand. If we don’t get reform over the next couple of years you are going to see more community newspapers or radio stations or other things no longer able to operate.”

Grieve was one of the media execs who pushed for Commerce Commission approval for media to bargain collectively with Google and Meta for news payments.

Backing the Bill – or starting again?
Local media executives, including Grieve, recently met behind closed doors to re-assess their strategy.

“Some major industry participants are still quite gung-ho with the legislation and think that Google is bluffing when it says that it will turn news off and break its agreements. And then you’ve got another group that think that they’re not bluffing, and that events have since overtaken [the legislation],” he said.

“The technology platforms have products that are always in motion. What they’re essentially saying — particularly to smaller countries like New Zealand — is: ‘You don’t really get to make laws. We decide what can and can’t be done’.

“And that’s quite a confronting thing for legislators. It takes quite a backbone and quite a lot of confidence to sort of stand up to that kind of pressure.”

The government just appointed a minister of rail to take charge of the current Cook Strait ferry crisis. Do we need a minister of social media or tech to take charge of policy on this part of the country’s infrastructure?

“We’ve had successive governments that want to be open to technology, and high growth businesses starting here.

“But so much of the internet is controlled by a small handful of platforms that can have an anti-competitive relationship with innovation in any kind of business that seeks to build on land that they consider theirs,” Greive said.

“A lot of what’s happened in Australia has come because the ACCC, their version of the Commerce Commission, has got a a unit which scrutinises digital platforms in much the same way that we do with telecommunications, the energy market and so on.

“Here there is just no one really paying attention. And as a result, we’re getting radically different products than they do in Australia.”

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

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