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MediaJune 16, 2022

Sky just decided not to buy MediaWorks. Why?

sky tv mediaworks
sky tv mediaworks

Last Tuesday our biggest TV company was about to buy a radio and outdoor advertising giant. Yesterday that dream died. Duncan Greive explains what happened.

Just over a week ago I was typing on this same laptop about the smouldering potential of a tie-up between pay TV colossus Sky and the radio and outdoor giant MediaWorks. Last night, just as TVNZ was entertaining advertisers at the launch of its rebranded streaming service, phones lit up with the news that the deal between Sky and MediaWorks was not happening. 

Just letting you know that we’ve made the decision this evening to not proceed with negotiations on the potential MediaWorks acquisition,” a very short email from Sky’s comms read. “We’re advising shareholders of the decision now, and I wanted to let you know directly too.” 

Wait, what?

It is a lot to take in. The Sky-MediaWorks deal had the appearance of the biggest media transaction in New Zealand since Sinead Boucher bought Stuff for $1 at the apex of the first wave of the pandemic. It involved Sky, by some financial metrics our largest media company, buying MediaWorks, a very serious player in two of the most stubbornly cockroach-like categories in media: radio and out-of-home (essentially, billboards). After a decade in which major media consolidation tended to take for ever before being blocked by the Commerce Commission (see: NZME and Stuff; Sky and Vodafone), this felt like the kind of consolidation the industry had been seeking for years.

Hadn’t they only just started talking?

It is very abrupt. Sky had been courting MediaWorks for months before news leaked to the Australian Financial Review, a business newspaper known for being a reliable location to leak to when a transaction is dragging its feet. While MediaWorks is (reluctantly) owned by private equity, Sky is publicly traded on the NZ stock exchange, which meant Sky’s owners gave their verdict very quickly. 

The market didn’t like what was being proposed, sending shares down as soon as the deal became widely known. Analysts thought Sky shouldn’t be spending money, and should instead be returning any cash to its shareholders in the form of dividends. 

Aren’t businesses meant to try to grow?

Under normal circumstances, yes. But these are increasingly strange times we’re living in. The current high inflation we’re experiencing has central banks raising interest rates to get it under control. This means they’re making borrowing money more expensive, which in turn makes having money in the first place more enticing. Sky has a lot of money in the bank, so much that it could buy MediaWorks pretty easily. Unfortunately those who own Sky shares had other plans for that money. Like taking it themselves.

Sky can be viewed as a counter-cyclical business, meaning people use it more when times are hard. During the last recession, way back in 2008-2010, people stayed in and watched Sky, instead of going out and spending money on clothes or restaurants. MediaWorks, which makes almost all its money from advertising, is a regular old cyclical business. It makes money from advertising, which people buy more of when people are also buying clothes or eating at restaurants. So because there is more and more fear of a recession, a business like MediaWorks is suddenly viewed as a lot more shaky than one like Sky. 

Is this kind of like what’s going on with Twitter? And something to do with the bear market?

Yes. Elon Musk agreed to buy Twitter (which is also, at the moment, an advertising-driven business), way back in the mists of April 2022. He currently spends most waking hours seemingly trying to back out that deal, because if he were walking into the giant business store right now he could buy Twitter for far less than the price he agreed to a couple of months ago.

This might be seen as a version of that – Sky being interested in buying MediaWorks at one point in time, and being less excited a bit (read: a week) later, when circumstances have changed. So the deal collapsing is not necessarily about MediaWorks or Sky so much as it’s about the global economic outlook, which is extremely stormy. Russia’s war on Ukraine, spiking oil prices, the crash in crypto and the bear market are all connected, and all played a part in sinking this deal.

Sky TV CEO Sophie Moloney and MediaWorks hosts Duncan Garner and Tova O’Brien (Image: Archi Banal)

How does it impact Sky and MediaWorks?

The deal falling over is most disappointing for the two people running the organisations. Each has been in their roles for a limited period of time and is looking to make a mark. For Sky’s Sophie Moloney this was an opportunity to scale and diversify the business and give it a different stake in its home market. For MediaWorks’ Cam Wallace it represented an opportunity to finish the endless saga of its owner’s reluctant role in New Zealand’s media market and move on to a different leadership role somewhere else.

Now each is somewhat chastened. Moloney has to face up to the fact the conservative investors who ultimately own Sky want different things to what she and her staff do, meaning change might have to come more incrementally. Wallace might have to stick around a little longer to see through the transformation and sale of MediaWorks, which was only 18 months ago still tied up with Three. 

Where to next?

The deal might feel dead, but it’s not. Bear markets and recessions often push owners to sell things for less than they might have thought they were worth a few months earlier. It might be that MediaWorks’ owners will take another deal later in the year. Or that another buyer – Stuff, perhaps? – might still emerge.

The thing that has not changed is that New Zealand has a bizarrely fragmented media market. We have a similar number of scale players as Australia, with a fifth the population. At the same time, the demands for investment are huge – all of us would prefer to have more stuff to sell, and better technology underpinning what we do, for example. All of which would be much more easily accomplished spread across fewer entities.

So while this particular deal is dead, the need for mergers and acquisitions remains very present (that much is clear from the government’s still urgent desire to get RNZ and TVNZ together). What this means is that for people who work in or consume media (ie, all of us) this deal might be finished – but there is no doubt that something else will replace it.


Follow Duncan Greive’s NZ media podcast The Fold on Apple Podcasts, Spotify or your favourite podcast provider.

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Image: Archi Banal
Image: Archi Banal

OPINIONMediaJune 13, 2022

Thank god no one tried to out me

Image: Archi Banal
Image: Archi Banal

First the Sydney Morning Herald threatened to out Rebel Wilson. Then they complained about being ‘gazumped’ when she refused to play by their rules. The sheer audacity, writes Mad Chapman. 

I’m trying to imagine what I would have done if a journalist threatened to out me. If a journalist emailed me to say they’d heard I was in a relationship with a woman and I had two days to confirm or deny before publication. I probably would have done exactly what Rebel Wilson did on Friday: share my relationship on social media so that it wasn’t news any more. Except unlike Wilson – who captioned the Instagram photo of herself and her partner with “I thought I was searching for a Disney Prince… but maybe what I really needed all this time was a Disney Princess” – I would have named the journalist and outlet and made sure everyone knew what they’d tried to do.

Wilson didn’t do this. Instead, Sydney Morning Herald columnist Andrew Hornery narked on himself with a column complaining that Wilson had “opted to gazump” the outlet’s planned story on Wilson’s new relationship, which was being celebrated by fans online.

“It was with an abundance of caution and respect that this media outlet emailed Rebel Wilson’s representatives on Thursday morning, giving her two days to comment on her new relationship with LA leisure wear designer Ramona Agruma, before publishing a single word,” he wrote.

“Big mistake.”

There’s something unbelievable about not only planning to out someone in 2022 (the editor has since denied that this is what the outlet wanted to do), but then complaining when that plan doesn’t work out. It’s literally unbelievable. I read Hornery’s words (it only took him 341 words to ruin everyone’s day) and genuinely did not believe that they were real. Does this sort of thing really still happen?

How Andrew Hornery’s column on Rebel Wilson began

I got my first real job in media (or anywhere) in 2016. I realised I was gay in 2021. Why it took so long is for me and a paid professional to figure out. But I certainly never factored a public outing into my thinking. In my time as a writer I have seen few, if any, instances like this in New Zealand. But they have happened. Alison Mau was simultaneously outed by the Herald on Sunday and Woman’s Day in 2010 (In 2017, Rebel Wilson won a defamation case against Woman’s Day). In 2014, Stuff ran a story about a sex video involving a New Zealand actor and a rugby player. Scroll down to the bottom of that article and it reveals the story was originally published in the Sydney Morning Herald.

I’m not famous like Wilson, but the process of coming out is still the same. Once I knew (a very unceremonious realisation one Saturday morning while hungover on the couch), I immediately wondered who I should tell and how. I was advised by a friend that I actually didn’t have to tell anyone, but I wanted to make sure people knew when I wanted them to, and not because someone saw something and told someone who posted a comment somewhere public. I had those thoughts as a 27-year-old random in Auckland. I’m sure Wilson had many more thoughts as a world-famous actor.

“Considering how bitterly Wilson had complained about poor journalism standards when she successfully sued Woman’s Day for defamation, her choice to ignore our discreet, genuine and honest queries was, in our view, underwhelming.”

The entitlement in this line from Hornery is astounding, not least because it reads as though he really believes it. The editor of the Sydney Morning Herald responded to the backlash by saying he hadn’t decided whether to publish a piece about Wilson’s relationship by the time she posted about it herself. They were just asking questions.

Hornery then went on (yes there’s more even though it was, as I said, only 341 words) to suggest that because Wilson had had a boyfriend in the past, “It is unlikely she would have experienced the sort of discrimination let alone homophobia – subconscious or overt – that sadly still affects so many gay, lesbian and non-hetero people.” Oh buddy. What a beautiful car crash of a sentence. To express something so ignorant while being semantically inclusive with “non-hetero people”. Like carefully polishing a massive piece of shit.

Ultimately, the Sydney Morning Herald could have published absolutely nothing and that would have been the correct course of action. Instead, they pulled the classic move of forcing, and then inserting themselves into, someone else’s coming out story. Some of us are late to our own queer parties, and some may choose never to talk about it. That’s the beauty of choice.

One thing’s for sure: anyone choosing to be open about themself and who they love will never “gazump” a media story about their own life. Hornery was pissed about that, and likely about the reader traffic lost as a result. Sadly, his self-own and the editor’s hamfisted response has resulted in maybe even more traffic for the website than if they’d gone ahead and outed her. Sex and sexuality sells. But so does ignorance.

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