Sky TV acquired Three from global giant Warner Bros Discovery for a nominal $1 in a cash-free, debt-free deal that took effect from August 1 last year.
Now, financial statements show that Three (officially known on the books as Sky Free Ltd) posted a $4.884m after-tax loss in the 12 months to December 31. That compares with a $77.6m after-tax loss in 2024 and a $132.8m loss in 2023.
The financial statements show Sky Free’s total revenue (including advertising) was $85m compared with $107.8m in the previous 12 months.
While it’s still losing money, the bottom line has vastly improved because expenses have almost halved – from $180.7m in 2024 to $91.8m in 2025 – much of which was a huge drop in salaries, from $54.7m in 2024, to $13.9m last year.
Up to 300 jobs were axed at TV3/Three when Warner Bros Discovery closed its news operation, Newshub, in July 2024.
Former Newshub presenters Samantha Hayes and Mike McRoberts on the eve of their final bulletin in July 2024. Photo / Sylvie Whinray
Media firm Stuff now provides the 6pm Three News to Sky under contract.
Three also has a number of local and international hits, especially in the reality TV space – titles include Married At First Sight Australia, The Traitors New Zealand and David Lomas: Breakthrough.
Investigative journalist and TV presenter David Lomas, host of Three’s David Lomas: Breakthrough. Photo / Dean Purcell
Sky TV’s $1 acquisition of Three was one of the biggest media plays of 2025, but it has not been an easy 10 months.
The new financial statements reveal WBD undertook a capital raise “to fully settle all outstanding debt as at 31 July 2025, in accordance with the completion requirements of the acquisition by Sky Network Television Ltd”.
“The capital raise was completed on 28 July 2025 in three instalments of $171m, $52m and $8m, resulting in total proceeds of $231m.”
In February, Media Insider revealed that Sky TV was tracking below expected advertising revenue in the early weeks of 2026. It earlier conceded the market was “softer”.
Sky TV lost its respected sales leader Ben Gibb last year, in the wake of the Three deal. Gibb walked into a leadership role at outdoor advertising company QMS.
TV3’s former boss, Juliet Peterson, then departed Sky in April, followed by sales leader James Hole later that month.
Hole had just helped lead a major restructure of Sky TV’s commercial teams – essentially pulling together the sales teams of the traditional Sky business with those who came across from Three.
Sky has said it 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 CEO Sophie Moloney (far left) – the company acquired TV3 (and Married at First Sight rights) in the past year, renewed its All Blacks rights, but it’s also lost HBO content from its Neon channel and is facing a softer advertising markert. Photos / Greg Bowker, Sky, Channel 9, Photosport.
Nevertheless, Sky TV chief executive Sophie Moloney indicated last year that tough work was ahead.
“You don’t get something for a dollar if it’s profitable, but we’ve structured this so we’ve got time – the runway, as we say – to get to that ebitda growth of at least $10m by FY28.”
Going concern
Notes attached to the financial statements say the statements have been prepared on the assumption that the company will continue as a going concern.
“The company reported a loss before tax of $4.8m (2024: $77.5m) and negative cash flows from operating activities of $55.7m (2024: negative $46.4m) for the year ended 31 December 2025.
“As at 31 December 2025, the company had net assets of $13.7m (2024: net liabilities $208.6m), positive working capital of $11.9m (2024: negative $207m), cash balances of $16.4m (2024: negative $26.8m) and a nil bank overdraft balance (2024: $167m overdraft).”
The settling of all outstanding debt had “significantly strengthened the company’s financial position relative to the prior year, as evidenced above by the company now reporting positive net assets, positive working capital and no overdraft facility (compared to a substantial overdraft facility in the prior year).”
Sky TV said this would be the final standalone financial statements for its free-to-air company.
“The directors consider that the company’s inclusion within the Sky Group is a significant factor supporting the going concern assessment, as strategic integration initiatives are expected to result in ongoing cost efficiencies through the sharing of costs and resources across the group.
“In addition, the directors of Sky Group (the ultimate parent) have committed to provide sufficient financial assistance to the company while these initiatives are being implemented. The directors believe that this will enable the company to continue its operations and fulfil its obligations as and when they fall due. The aforementioned is relevant for a minimum period of 12 months from the date of signing these financial statements.”
Sky TV refused an interview with Moloney today, instead providing a public relations statement that said the financial statements related to a period when the business was largely owned by WBD (WBD had it for seven months; Sky TV for five months in 2025) and “do not reflect how the business operates today”.
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.