The Herald reported this morning that MediaWorks was on the verge of selling its TV assets to US TV giant Discovery – but an internal email and senior source suggest the story may have been premature.
A senior MediaWorks source has emphatically denied a report in the NZ Herald that a sale of Three to US TV giant Discovery is imminent. An email has been sent to all staff at the multimedia giant, making it clear there are multiple interested parties, and talks have not progressed to the point where the business is near sale.
“You have probably seen speculation across media outlets today about the potential sale of TV,” the email reads. “Yes, the sale is still progressing – however we are speaking to multiple potential buyers, and no announcement is imminent.”
The source said they were surprised to see the story, because any sale would likely be contingent on a period of exclusivity in negotiations, and that no such period had commenced. They characterised the negotiations as consisting of different levels of potential buyers, with multiple parties considered as strong contenders and in live talks, while others had signalled interest, but were not currently in the conversation.
The Herald’s report sent shockwaves through MediaWorks and the broader media industry, with its potential to bring to an end one of the most long-running sagas of our local media ownership. The sale of Stuff last week meant that focus switched to MediaWorks, which last year admitted its TV business was for sale.
The criteria for sale was not just the best price, the source said, but whether the acquirer’s plans appeared sustainable, and represented the best outcome for staff on the TV side of the business. The potential for news output to be reduced had not been part of any discussions.
Since news broke late last year that the channel was being readied for sale, a large number of potential buyers have been included in reporting, including Discovery, the Nine Network or Seven Network in Australia, NBCU or CBS in the US or Sky TV in New Zealand.
The sale talks had been realigned by the ongoing fallout from Covid-19, and its impact on the ad market, but remain very much ongoing. The Herald report was characterised as totally inaccurate in its timeframe, but The Spinoff’s source refused to confirm or deny Discovery’s involvement in discussions.
The news comes as MediaWorks, like all businesses with large exposure to the commercial advertising market, struggles to cope with a major reduction in advertising. Under the level four lockdown volumes and rates crashed, and while they have recovered somewhat as New Zealand has reopened, they remain below prior levels, with a deeply uncertain prognosis as the recession comes into view.
MediaWorks staff were asked to take a voluntary 15% pay cut in April, while 130 redundancies were proposed last week, on the same day that Stuff was bought by its CEO Sinead Boucher for $1. Along with redundancies at Sky and NZME and the collapse of Bauer NZ’s magazine publishing business, the New Zealand ad-funded media industry is under extreme stress. The government acknowledged this in announcing a $50m bailout of the industry, widely seen as disproportionately benefitting MediaWorks.
While the source continued to maintain that no sale was imminent, they said that the process was still very live, and while it had been delayed by the pandemic, that they anticipated it concluding before the end of 2020.