StuffMe becomes RebuffMe in a crisis
Auckland, May 12, 2020
Three years of attempts to merge our largest publishers might have been extinguished in 90 chaotic minutes.
Media heavyweights NZME and Stuff have long courted each other in a volatile, stop-start relationship, but when NZME finally brought out the ring and publicly declared its undying commitment, Stuff revealed it had moved on.
Within 90 minutes of NZME seeking the Government and Commerce Commission’s blessing, and publishing its banns of marriage on the New Zealand and Australian stock exchanges about 930 am, Stuff’s owner, Australia’s Nine Entertainment, issued a “We are finished” and “Don’t call me” response. It had, it said, “terminated” its engagement with NZME on Stuff.
NZME persists in relationship
NZME insisted the couple were still an item, telling the stock exchanges before midday that it had exclusive rights to its intended.
But even if it somehow persuades Nine back to the table, its crucial wish for urgent political and regulator permission to join in unholy mediamony will almost certainly go unheeded.
It had asked the Government to pass a law allowing the Commerce Commission to speed up its processes to let it conclude the deal by May 31, 2020, a mere 20 days.
Neither Communications Minister Kris Faafoi nor the Commission itself can entertain such urgent change when one party to the deal is at best uncertain and at worst expressly unwilling to be bought.
Nine may close Stuff
It remains a possibility that Nine is contemplating closing Stuff rather than bothering with a regulatory process and sale and it is that which prompted NZME’s desperation to force everyone’s hand.
But how NZME could have gone public without agreeing with Nine to do so simultaneously, or how it could hope to win political backing for something as untidy and now controversial as this, will be a subject for study at future business school courses on governance and deal-making.
Even if it is right and its binding and exclusive negotiating period is intact, no government would surely entertain passing a law change when the two parties are at odds.
Ned for competition
In itself, allowing two big media companies previously denied merger by the Commission, then High Court and Court of Appeal, to join would have been a difficult policy call.
MPs are as aware of the need for plurality of voices, and ownership, in the news media as anyone.
Then for the proposal to be presented as so urgent it must be concluded – not initiated, but concluded – within 20 days, was enough for judicious political minds to take fright. No one likes being stampeded, even during an economic and media industry crisis.
Then for it to unravel within 90 minutes of being announced; for the supposed agreed $1 purchase of Stuff by NZME to not actually be ‘live’ according to Stuff and its owner, would surely have seen this May 31 proposal dead on arrival at Faafoi’s desk.
More than one bidder?
Faafoi is saying nothing and his Prime Minister Jacinda Ardern was at pains to offer no view at her afternoon press conference, citing commercial confidentiality when the issue was really political taste for the principle of what is proposed.
Interestingly she implied more than one bidder for Stuff was in play.
Stuff says it is surprised that NZME went public with its plan after Nine had told it last week it had terminated not just the talks but “future engagement” with NZME.
In a note to staff, Stuff chief executive Sinead Boucher said: “There is no deal between NZME and Nine. …We are really not sure why NZME took this step, given the clear message from our owners that there would be no transaction.”
NZME’s emphasis in its second, rushed, statement to the stock exchanges that its ‘exclusivity’ in negotiating to buy Stuff was still intact seemed to hint at a suspicion Nine could be entertaining an offer from a third party.
Double purchase in Australia
In Australia, there had been word in the market that a private equity player had in recent weeks been sounding people out about a possible purchase of both NZME and Stuff.
Here, the ever-ambitious publisher of the business website NBR has been claiming to have funding through a private equity fund and a strategy to buy and run Stuff.
Another possibility is that of Nine closing the business altogether and exiting New Zealand.
Politicians would not have wanted the responsibility of denying a possible deal and then watching as hundreds of jobs – in journalism and support areas – were lost.
The corporate omnishambles that eventuated Monday morning, with someone formally seeking permission to buy something that the other party was no longer prepared to sell to it, has relieved the politicians and regulator of that burden.
Concern over the fate of Stuff, in particular, and its hundreds of staff will remain.
Credible information is crucial in a crisis.
Tim Murphy is Co-Founder and Co-Editor of Newsroom. The above article has been published under a Special Agreement.
