Exclusive: Leaked emails and documents show that the media giant will soon be two legal entities – opening up a range of options for owner Sinead Boucher. Duncan Greive analyses the move.

News media giant Stuff will soon be two separate businesses, as it splits into one built around the Stuff brand and platform, and another which holds brands based around its newspaper assets. Existing staff will be split into one or other of the businesses, and compelled to either go along or face termination. This move mirrors what occurred operationally in 2023, but goes a significant step further in making two separate legal entities.

One part of the business will be known as Stuff Digital Ltd, and along with Stuff will feature social network Neighbourly, the audio and video divisions which create ThreeNews for WBD, and its stable of podcasts. The other entity will be Masthead Publishing, and will hold historical news brands like The Post, The Press and The Waikato Times, along with their respective digital sites, along with dozens of other newspapers around the country. 

Despite efforts to downplay its significance, the move opens the door to the possibility of profound change at the country’s largest employer of journalists, at a time when the news media is under immense strain, reeling from the closure of Newshub as part of hundreds of job losses in 2024. Stuff itself has seen significant motion in 2024, taking on a large video operation while also seeing CEO Laura Maxwell and head of commercial Matt Headland resign. Neither of those executive roles has yet been permanently replaced, while two of Headland’s direct reports have subsequently resigned too.

In an email to staff from Stuff CFO Dale Bridle, the move is described as a “conscious uncoupling” which will allow “both businesses to follow their own content and revenue strategies and have their own future focus”. Currently the business is organised into three divisions – digital and mastheads reflect the respective news businesses, while “Brand Connections” is the advertising division which fuels them both. Under the new structure, that part will be split into two and tied to one of Stuff Digital or Mastheads.

Bridle was at pains to downplay the impact of the change on staff and advertisers in the email. “It’s important to note that no one’s terms and conditions or reporting lines will change… our customers will continue to have a single point of contact in the brand connections team.” All staff will maintain the existing terms of their employment, including leave entitlements and holiday pay, in the new entities, according to Bridle.

Why do it at all? 

The move follows changes made in many so-called legacy media companies all over the world. It attempts to draw a clear business distinction between sunsetting analogue-era assets like cable channels and print assets, and the parts of the company which can be modelled into technology-centric businesses, like streaming services or digital news. Currently US cable TV giant Comcast is in the process of creating “SpinCo”, which will hold and acquire basic cable networks that TV and movie companies, now focused on streaming, no longer want.

Newspapers have long been a major target of private equity groups, which see their still-profound cashflows and purchase them knowing full well there is not a long-term future, but that profits can be extracted in the short-term – often at the expense of their journalistic function. It opens up more options for Sinead Boucher, the former Stuff editor who now owns both companies and currently acts as interim CEO.

The Spinoff put several questions to Stuff, but the company chose not to address them, with a spokesperson only saying “this is just the formalising of a process we started 18 months ago with the two businesses and we’ll continue to operate within Stuff Group as we currently do”. 

One unanswered question pertained to whether the move was done with a view to sell one or both of the businesses. Another question asked where the journalism will sit – in Stuff, in Mastheads or in both. Currently Stuff focuses on “live and lively” journalism, largely ad-funded and delivered through its freely accessible website and apps, which currently draw the largest national audience in digital news. More meaty and regionally specific journalism is distributed through individual sites for The Post, The Press and The Waikato Times. 

The Stuff spokesperson’s “nothing to see here” response suggests the new company structure will simply carry on this current approach. However it does invite a different path, should ownership change. For example, all the websites and the journalistic function of both Mastheads and Stuff could transfer to Stuff Digital, which would then become a paid supplier of content to Mastheads, to fill up the various print products. This would effectively recreate the model Stuff is already pursuing with the 6pm bulletin it creates for Three under the name ThreeNews, but transfer it to the print medium.

The upside would be a more coherent, future-focused and streamlined journalism business, working at both wholesale and retail, separated from a design, printing, distribution and advertising business in mastheads. It allows a financially focused investor to take on the newspaper business, without getting involved in the messy business of journalism, while Stuff can stay committed to its core mission of creating news each day.

It’s not without complications, some of which are baked into Stuff’s current reality. The decision to create three separate paywalled sites, while keeping Stuff freely accessible, raised eyebrows from some in the industry, given how difficult it is to build habit in the current search and social media era. The fact the paywalls are frequently left open has some in media theorising that they have not brought in the projected audience revenue. Stuff still retains the option to do over, erecting a paywall for Stuff, to compete like-for-like and head-to-head with the NZ Herald – albeit five years and counting behind its competitor.

Whichever path the Stuff takes, this is an epochal moment for a company which was painstakingly built up over decades of newspaper acquisitions, then sold to Fairfax, before being dramatically rescued by then-CEO Boucher at the height of first wave Covid in 2020. Once separated, the companies will have their own staff, leadership and goals – and perhaps eventually owners. It’s a definitive inflexion point, with one part of the company left holding the past in the form of historic news brands (though it retains the digital assets of those brands) while another becomes wholly committed to the future. 

The business of journalism in New Zealand could be definitively changed as a result.

This story has been updated to underline the fact that both Mastheads and Stuff Digital will have digital components. This was evident in the original, but has been emphasised at a Stuff spokesperson’s request.