NZME seeks urgent help to buy Stuff for $1

Publish Date
Mon, 11 May 2020, 9:56AM

NZME seeks urgent help to buy Stuff for $1

Publish Date
Mon, 11 May 2020, 9:56AM

NZ Herald owner NZME has today sought urgent Government help to allow it to buy rival publisher Stuff within three weeks, saying it is the best owner to save newspapers and jobs.

It has filed an urgent Commerce Commission application today for the purchase - for $1 - and wants to have the transaction complete by May 31.

It is seeking the Government's help with urgent legislation to help clear the application.

The company revealed in a market announcement to the NZX that it entered an exclusive negotiation period with Stuff's owner, Australian-based Nine Network, on April 23.

The $1 purchase price excluded "certain non-media assets" but included Stuff's material trading assets and liabilities.

"NZME believes that the New Zealand media sector is too small for the current number of quality participants and consolidation is urgent in the face of dramatically declining advertising revenue and current general economic conditions," NZME said in its NZX announcement.

"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."

The company has spent the best part of five years attempting to buy Stuff but has previously been declined Commerce Commission clearance.

It says the media landscape has been so wildly impacted by Covid-19 and foreign digital giants such as Facebook and Google that it is the best owner in order to save newspapers and journalism jobs.

"NZME's proposed acquisition of Stuff is important to the continued operation of a robust fourth estate and plurality of voice in this country," NZME told the NZX.

"If approved, the acquisition should lower the costs of producing New Zealand news by combining NZME and Stuff's business operations, with those savings supporting the future of New Zealand journalism by a local, committed national news media outlet."

In a letter to Broadcasting Minister Kris Faafoi today, NZME chairman Peter Cullinane and CEO Michael Boggs said NZME fully respected the commission's processes and "will see our application through if possible".

"The significant obstacle we face is that there is insufficient time to do so given the extraordinary conditions the industry finds itself in. We are mindful of what happened to Bauer Media and we are focused on saving hundreds of jobs and regional mastheads which may be lost if we do not act with this urgency. Time is of the essence and we seek your urgent assistance to allow completion by 31 May 2020."

NZME and Stuff own most of New Zealand's daily metropolitan and regional mastheads. As well as the NZ Herald, NZME owns the Northern Advocate, Bay of Plenty Times, Hawke's Bay Today, Rotorua Daily Post and Whanganui Chronicle.

Stuff's stable includes the Sunday Star-Times, The Press in Christchurch and the Dominion Post in Wellington.

NZME says the purchase is the best possible way to preserve plurality of voice – a key sticking point for the commission in the past.

In their letter, Cullinane and Boggs said NZME and Stuff shared a proud legacy of community, regional and national journalism.

"By coming together, we enhance that expertise to ensure the best possible retention of community, regional and national newspapers and content, ensuring a diversity of voices across the many platforms," they wrote.

"As a New Zealand-listed organisation, solely operating in New Zealand, we have this country's best interests at heart – through sustained, independent journalism, and using our platforms for public good campaigns, including supporting New Zealand businesses in their hour of need and beyond."

They said as employers of the biggest number of regional and national journalists, the company was committed to the craft of journalism and its "critical role" in a fully functional democracy "including the coverage of councils, community boards, public bodies and Parliament".

The company has also said the media industry in New Zealand is broad, with strong public broadcasters in RNZ and TVNZ as well as the likes of MediaWorks, Sky TV, Maori Television, and independent publishers such as Allied Press.

German-owned magazine publisher Bauer announced the sudden closure of its New Zealand operation - and with it the loss of more than 200 jobs - soon after the country entered level-four lockdown.