Auckland, April 9, 2010
Inside, the pressure building on the government to step in and save news media businesses before it is too late.
For months, some parts of the news media have been sending out SOS messages publicly and in intense lobbying in the shadows of bureaucracy for urgent Government financial and regulatory help to keep them alive.
The notable biggies
The most notable were MediaWorks, which raised the possible closure of its Three Television Network, and New Zealand Herald publisher NZME and its rival Stuff Ltd, which were pushing hard for a dispensation from government for a previously legally rejected merger of their operations.
Government agencies and ministers heard the noise, and the New Zealand First Party was an early adopter of the StuffMe II merger argument. But, with their own plans for a restructure of the two Government-owned broadcasters, TVNZ and RNZ, stalled by a reticent Cabinet, the powers-that-be did not seem to know how to respond to the urgent private media pleas.
The Covid-19 pandemic and economic collapse has changed all that.
As with other industries stricken by the sudden suspension of operations and evaporation of customers and revenue, some of the bigger private media players are on their knees.
The perilous state of their books and the possibility of insolvency and, as with the closure of Bauer Media’s magazines, disappearance of jobs and media voices, has put the Government response on extreme alert.
Urgent matters supersede promise
Increasingly, the indications from the Minister of Finance Grant Robertson last week that some ‘medium-term’ measures to assist the industry were being contemplated are now overtaken by a need for something urgent within weeks.
We could, as early as next week, learn of immediate measures the state can take to relieve cost and divert revenues to media companies. No one measure would help all the entities, broadcasters and print/digital, big or small, in the same way. So a menu of interventions could follow.
There is understood to be a firming view among industry insiders that a green light for changes to the Commerce Act or an instruction to the Commerce Commission to make media mergers achievable – thus preventing the possible demise of one or both of NZME or Stuff – is winning favour.
Whether that translates to approval for such a drastic and politically tricky measure by the Cabinet is another thing.
Plurality and diversity
Previous rejections of the StuffMe proposal were firmly based on concerns about the plurality of media voices, diversity and a risk to democracy of narrowing ownership of all major newspapers and both the country’s biggest news websites to one entity, owned predominantly by Australian fund managers.
Officialdom seems to have been spooked that a real risk to NZME and Stuff has firmed – and a merger, however politically unappealing, is the only answer.
The two companies had worked out, as far back as Friday, March 13, before the extreme effects of Covid-19 had been felt and before a nationwide lockdown was on the horizon, terms for NZME to buy the Stuff operations off Nine Entertainment of Australia.
It was decided even then to communicate to anyone who would listen that a deal for the two companies was the equivalent of a life or death requirement.
No one would question that the companies are both in a worse position now.
NZME closed its Radio Sport station and has laid off half its Herald sports desk, invited voluntary redundancies, enforced mandatory leave for staff and made company-wide cuts.
The publications of both companies are bereft of print advertising, other than for their own products and services and the Government Covid-19 campaign.
Exploring funding options
Both NZME and MediaWorks have talked of exploring funding from the multi-billion dollar state wage subsidy scheme. Stuff’s position has not been made public.
Possibly complicating the path ahead for one of the industry players under pressure is that its top boss is understood to have recently applied for leading executive roles in Australia, including at that country’s biggest outdoor advertising company, Ooh Media.
If the Government has to move fast, ahead of any commitment to change the Commerce Act, it is unlikely it would take equity stakes in private media companies to shore them up to prevent failure. But it could offer bailout loans in the way it did for Air New Zealand.
The immediate measures, when they come, will aim to keep the businesses running while a longer-term strategy for public and private media and how they are funded is completed.
The Government took its time picking up on the media SOS. Is it now on a rescue mission or one to recover the corporate bodies?
Tim Murphy is Co-Founder and Co-Editor of Newsroom. The above article has been published under a Special Arrangement.
