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

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