In Sky’s case, its executive and board were burnt by angry investors who rejected a bid to buy MediaWorks several years ago.
Sky last year acquired Warner Bros Discovery’s Three (TV3) in a fire sale – $1, debt-free – and is now focused on pulling the two operations together, no easy task, especially given the huge losses that the free-to-air TV network was racking up.
The company needs to extract as much value from the loss-making former Three business as quickly as possible.
Sky expects the Three deal to be positive for free cash flow from this financial year and has reiterated its commitment to a 30 cents per share annual dividend.
Sky TV shareholders are unlikely to take kindly to any distractions that throw the company off its trajectory.
NZME – the publisher of the NZ Herald – would likely be keen to buy at least some of the MediaWorks brands, but it would confront major regulatory hurdles with the Commerce Commission, given it already owns most of the other major commercial radio stations, including Newstalk ZB, ZM, Coast and The Hits.
Whoever does line up should not expect a fire sale.
Under MediaWorks chief executive Wendy Palmer, the company’s financial performance has steadily improved.
After splitting from QMS operationally last year, the radio company still has some 550 staff in New Zealand, and its music stations perform well.
After NZME’s Newstalk ZB in the top spot, MediaWorks stations occupy the other four spots in the top five commercial stations, as measured by audience share.
Nine’s QMS deal
Nine – which sold New Zealand’s Stuff publishing firm for $1 to Sinead Boucher in May 2020 – announced its acquisition of QMS, for $A850m ($986m), on the ASX on Friday morning.
QMS is a major player in the outdoor advertising market in Australasia.
In Auckland, QMS last year won the major contract to look after all of the advertising on Auckland Transport’s assets, including buses, billboards, bus shelters and train stations.
The contracts are valued by some in the industry at $350 million over the next decade.
QMS has the contract to run advertising on all Auckland Transport assets, including buses.
QMS has a similar deal in Sydney and it is also in line to win a similar contract in Christchurch – factors that would have made its purchase hugely attractive to Nine.
At the same time, Nine announced it was selling its own radio assets – talkback stations 2GB in Sydney, 3AW in Melbourne, 6PR in Perth and 4BC in Brisbane – to billionaire hotel baron Arthur Laundy for $A56m ($65m).
“Today’s announcements mark a critical milestone in our Nine2028 transformation,” said Nine chief executive Matt Stanton.
“These transactions will create a more efficient, higher-growth, and digitally powered Nine Group for our consumers, advertisers, shareholders and people. This positions Nine well for the future, enabling the Group to withstand industry disruption and deliver long-term sustainable value to our shareholders.”
Stanton said the acquisition diversified Nine’s TV, newspaper and digital revenue streams. Among its assets are the Sydney Morning Herald and The Age in Melbourne, and streaming platform Stan.
“Together with our existing media assets, the acquisition will allow Nine to offer customers a broader advertising solution and the use of tools such as Nine Ad Manager for more targeted and localised messaging across a wider set of customers. We also see the opportunity to promote and drive subscriptions for our publishing mastheads and Stan through leveraging any excess QMS inventory,” said Stanton.
“The QMS network will provide Nine with a branded platform to support key national news and sporting moments and serve as a public service utility for governments at all levels in times of emergency or community need. We are excited about the potential in this space.”
More to come
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.