NZME and Google are close to finalising a ground-breaking deal which will see the tech giant pay to have the New Zealand company's journalism supplied for its platforms. 

NZME - the owner of the NZ Herald, Newstalk ZB and five regional daily newspapers - said it was also in commercial discussions with Facebook (Meta). 

In an announcement this morning, NZME said it had signed a letter of intent with Google setting out key terms for the proposed payment from the tech giant to supply it with news content - and it has issued fresh earnings guidance for the full year. 

This means NZME and Google will enter into a period of negotiation of up to 90 days to finalise agreements around payment for journalism used on Google's digital platforms, including the new Google News Showcase. 

The final agreements are intended to be for a minimum term of five years. 

NZME said in a statement to the NZX that based on the "key terms" of the Google letter of intent and if the final agreements were entered into, the company expected earnings for the full 2022 year to be in the range of $67-72 million. 

That compares with the $66m reported for the 2021 financial year, announced a month ago. 

NZME said it was also in commercial discussions with Meta (Facebook) with regards to them supporting a number of digital transformation projects over the next year. 

The negotiations come as New Zealand news media seek Commerce Commission approval to collectively bargain with Facebook and Google. 

The move follows a similar "bargaining code" introduced in Australia to help support the sustainability of the Australian news media sector by addressing the bargaining power imbalances between the global digital giants and Australian news businesses. 

NZME said it has notified the News Publishers' Association and the Commerce Commission that it will not be participating in any collective bargaining with Google unless the parties fail to execute binding agreements on the terms set out in the Google letter of intent. 

NZME chief executive Michael Boggs said today's announcement further demonstrated the company's commitment to growing and evolving its digital platforms. 

"We are pleased to have reached a point with Google where we can partner with them to further enable digital growth across NZME's business, boosting digital revenue for NZME and increasing our audience reach," Boggs said. 

"We look forward to reaching final agreement with Google that will see NZME's news content supplied and shared through Google programmes, continuing to support the future of high-quality, trusted journalism in Aotearoa," he added. 

Caroline Rainsford, Google New Zealand country director, said Google was proud to continue to support original, trusted, and quality journalism. 

"We are pleased to build on years of partnership with NZME as a major New Zealand publishing partner. We've helped support the local news industry for two decades and we look forward to continuing to build on this important work to support the future of journalism in Aotearoa," she said. 

NZME said it expected to make a further announcement in relation to the outcome of the negotiation of the final agreements with Google and the commercial discussions with Meta. 

Arie Dekker, head of research at investment firm Jarden, said it was another good announcement from NZME. 

"It's nice for them to be extracting some value out of these global tech players who have been generating meaningful revenue in New Zealand for a while now." 

Dekker said based on NZME's guidance, a Google deal looked to be worth in the low-to-mid single-million dollar range for the 2022 financial year. With Meta on board as well that would rise though. 

"Some growth would already be implied at the lower end of NZME's earnings guidance but it's worth noting that the Google deal would only be in place for part of the year." 

NZME shares climbed 12c, or 7.84 per cent, to $1.65 on the news. 
The stock is up 78 per cent over the past 12 months.