The home of some of New Zealand and Australia’s most popular magazines is looking for a buyer. But why now and who are the top contenders to take over?
In 2020, the media landscape of New Zealand and Australia changed forever with the closure of Bauer Media.
Covid-19 led to the German-owned business reviewing its global operations and deciding to exit the market here and across the Tasman. At the time, Bauer owned approximately 70% of the magazine market in New Zealand. The decision sent shockwaves through the industry, and led to the sale of the company’s assets to various new owners.
A number of Bauer’s most successful Australian and New Zealand titles such as the Listener, New Zealand Woman’s Weekly, Woman’s Day and Kia Ora were sold to Sydney-based Mercury Capital, which rebranded the company as Are Media. The transaction was estimated to cost between $44-54 million and came just five years after Bauer paid $572m for ACP Magazines. Now, five years on from the purchase, the portfolio is once again up for sale.
The decision to sell Are Media was confirmed in an email sent to staff members earlier this week from chief executive Jane Huxley: “After careful consideration, Mercury and our Board have decided it’s time to begin the process of finding a new owner for the Are Media Group.”
Are Media was part of Mercury’s $600m fund, which includes the likes of ticketing and event promotion and technology company TEG. It is one of four funds managed by the company, with the total amount under management by Mercury Capital amounting to approximately $1.3 billion. While it is common practice for equity firms such as Mercury Capital to purchase these types of investments, implement a lean management approach, and then sell quickly, Mercury has held Are Media for around five years.
“This decision comes from a place of strength and optimism. We’ve built incredibly strong foundations, and now it’s time to take the next step,” Huxley told staff.
Although the titles have retained a loyal following, declining circulation numbers and ongoing battles with advertising spend shifting to social and digital platforms has been an issue for the business – and indeed the industry as a whole. However, the Australian media market is faring slightly better than New Zealand, primarily due to Australia’s larger population and more diversified economy.
It is unknown if Mercury Capital intends to split the New Zealand assets from the Australian titles or sell them as a whole. If the assets are split, New Zealand’s largest multimedia company NZME could be a frontrunner for the purchase of the New Zealand titles. The New Zealand Listener’s online presence and subscriptions are currently managed by NZME’s subsidiary the New Zealand Herald. The Listener magazine remains the country’s second-most popular magazine, behind only to AA Directions. Last year, the Listener increased its readership to 220,000, up 2,000 compared from 12 months earlier. NZ Woman’s Day was third and Kia Ora in fourth, with readership increasing by 14,000 to 145,000 and by 12,000 to 137,000 respectively.
The sale will be led by KPMG, and follows a recent announcement of a strategic partnership between Are Media and United States publishers Dotdash Meredith.
“I know that announcements like this can create uncertainty, and that’s completely normal,” the email read. “We’ve built strong foundations over the five years, and now it’s time to take the next step. In the meantime, we are focussed on business as usual.”
