Murray Deaker has met some of sport's biggest names during his broadcasting career. Photo / Supplied
Why is TVNZ’s profit set to suddenly plunge? How other media firms are faring; Respected Sky TV broadcast editor’s untimely death; Murray Deaker promises to cull PC ‘rubbish’.
TVNZ is expecting a bottom-line $15.6 million loss for its 2023-2024 financial year after two years of profitability, according to new documents.
The sudden financial fall for the state broadcaster, set up as a commercial entity, highlights the major challenges facing every media business in New Zealand – and as it embarks on significant digital investment.
It follows a balance sheet full of red ink for TVNZ’s biggest traditional competitor, Discovery NZ’s Three, over the past two years.
Traditional broadcast audiences are dropping across the world and TVNZ is embarking on a major digital and cultural transformation, including upgrading the technology and user experience of its widely praised TVNZ+ on-demand platform.
“This will require significant investment, to be funded through cash reserves and earnings,” says the company’s new statement of intent, outlining the broadcaster’s plans for the next four years.
That document, along with the annual statement of performance, reveals a sober bottom-line financial picture for TVNZ, whose planned merger with RNZ was axed by the Government earlier this year.
TVNZ made a $7.9m net profit after tax in the financial year to June 30, 2022, and is forecasting a $2m profit for the financial year to June 30, 2023.
But the new documents reveal the steep plunge to the expected $15.6m loss for the financial year it has just started, to June 30, 2024.
Operating revenue is expected to be $329.9m and expenses $336m. Depreciation and amortisation also contribute to the expected loss.
TVNZ’s statement of intent provides further context to its challenges and strategic direction.
It says it has identified three strategic themes for this new financial year to help deliver on 2028 profit ambitions: extending its digital audience reach; accelerating digital revenue; and creating a sustainable future business.
“This will include commencing work on the IP [on-demand] Platform … and developing a Culture and Capabilities workstream to ensure TVNZ’s people are focused on and prepared for the future.
“New ways of working and undergoing a business-wide cost transformation will help TVNZ to deliver on its FY2028 profit ambitions.”
Foundation work on the new on-demand platform will start this year and continue into 2024-2025.
Further on in today’s column, we look at the various challenges and scenarios facing TVNZ and our other media businesses, amid concerns some may struggle to survive.
One of New Zealand sport radio’s biggest names, Murray Deaker, is on the verge of a return to broadcasting, 10 years after turning off the microphone.
He is in discussions to launch a podcast under the Newstalk ZB umbrella.
“We’re in talks with Deaks, but can’t say anything more at this stage,” said NZME chief radio officer Jason Winstanley.
Deaker let the cat out of the bag on another NZME show, The Country, this week. He told host Jamie Mackay his new podcast would launch next month.
“I’m going to start again, I got bored Jamie … there’s plenty to talk about at the moment,” Deaker told Mackay, before giving Australian rugby coach Eddie Jones a serve for his behaviour and comments at a press conference following the Wallabies’ loss to South Africa last weekend.
Deaker said his new podcast would be an antidote to political correctness.
“I’m not going to put up with any of that rubbish,” Deaker said. “The reality of sport is … [it’s] about doing your best, accepting your losses, being reasonably humble with your wins and getting on with life.
“The society that we’re living in, particularly the way it’s gone in the last three years, is horrifying. If I can play some small part in bringing some common sense into what has just become a PC disaster, I’ll do it.”
Deaker left Newstalk ZB at the endof 2013, then aged 68.
“Timing is everything in sport and life,” he said at the time. “I want to get out while I’m still at the top of my game.”
The fragile state of our media industry has been further laid bare in a new international report, which reveals New Zealand is one of only a handful of global markets that will record a drop in advertising revenue in 2023.
The GroupM report provides a detailed backdrop as to why just about every major New Zealand media business is making rapid changes to adapt to difficult market conditions, new technologies, changing audience habits and increased competition.
Some experts are predicting some companies may not make it in their current form or ownership.
GroupM New Zealand chief investment officer Steve Tindall is forecasting a 2.8 per cent decline for the Kiwi market in 2023, largely as a result of reduced Government advertising spending – a net reduction of about $94m.
He is not expecting the market to be back in growth until the second half of next year, in line with a forecast upturn in the housing market and the related boost in consumer confidence.
Tindall, a respected observer and analyst, has released his analysis alongside GroupM’s mid-year global forecast.
That report predicts growth of 5.9 per cent in the global advertising market. New Zealand is one of only a handful of countries, including Singapore, Kenya and Sweden, which are predicting decline as of June.
“Of the four markets that forecast decline in December, three are now projecting growth: Italy, Spain and Austria. Only one, New Zealand, remains in decline,” adds the report.
So how are New Zealand media businesses responding? (Major companies, in alphabetical order):
MediaWorks: Its private equity owners have been ruthless so far in cutting costs. They closed Today FM in late March, with the loss of more than 30 roles, following an estimated $1m loss for that station this financial year. The company has been relatively late in filing its annual results with the Companies Office. It still has an acting CEO, Wendy Palmer, following the departure of Cam Wallace in mid-March. There is speculation the company may sell its outdoor advertising arm.
NZME: The owner and publisher of the NZ Herald, radio stations including Newstalk ZB, and property portal OneRoof, has been cutting costs, as it signalled to investors in April. The publicly listed company said it had been a soft start to the year for advertising revenue, but it was still forecasting Ebitda to be between $59m and $64m. It has made a range of executive changes and is about to embark on a new three-year digital strategy. It will have high hopes for OneRoof once the housing market bounces back. One of CEO Michael Boggs’ biggest immediate challenges is how best to replace chief commercial officer Paul Hancox, who will be joining MediaWorks.
RNZ: Backed by a $25m budget boost from the Government, all eyes will be on RNZ CEO Paul Thompson and his leadership team to ensure they do not squander a massive opportunity to build under-served audiences – or to undermine commercial media. The public broadcaster has been under scrutiny over its internal editorial processes and structures following allegations a digital editor was left virtually unchecked to add pro-Kremlin content to international reports about the Russia-Ukraine war. It is understood the broadcaster is down to a shortlist of candidates for the role of head of news following Richard Sutherland’s resignation (unrelated to the editing scandal in the digital department).
SENZ: The Australian owners of the sport radio and digital network have revealed a forecast loss for its New Zealand operation of up to $3.3m for its latest financial year. The broadcaster has a stable of big-name hosts including Israel Dagg and Ian Smith, and this carries an undoubtedly hefty cost. The company insists it is committed to New Zealand.
Sky TV: Short-term, it can expect handy revenue from the likes of the Rugby World Cup and Fifa Women’s World Cup if it has its commercial and partnership strategy right. It will be buoyed by a new multi-year deal with Warner Bros. Discovery to retain HBO content and various Discovery channels. It will be keen to ensure New Zealand Rugby’s new digital move NZR+ does not kill its golden goose – All Blacks rugby rights.
Stuff: Financial results are not known or revealed – it is a private company purchased for $1 by Sinead Boucher in 2020 – and this has always led to questions over its performance and forecasts. A new-look leadership team – with more digital and business expertise and led by former NZME executive Laura Maxwell - has taken command. The publisher is cost-cutting and restructuring various roles, including some experienced editors and journalists. Its paywall strategy may need review to align it more closely with its mass-market main news website.
TVNZ: As a new board comes in (with its first task to appoint a new CEO to replace Simon Power) there will be a huge challenge to avoid an identity crisis. The current Government has signalled it wants TVNZ to be a much more focused public broadcaster – this potentially may hurt its commercial ambition. The company has released new statements of intent and performance expectations (see above), revealing a likely $15.6 million net loss after tax this financial year. The outgoing board signed off the all-of-business transformation plan which will “require significant investment to be funded through cash reserves and earnings”. The company is also managing costs.
Warner Bros. Discovery: The owner of Three and its news brand, Newshub, has revealed a $34.8m post-tax loss for its New Zealand operation in 2022. Just how long will the Americans be willing to prop up Three? They say they’re committed to New Zealand. Now that a new deal with Sky has been inked for HBO and other Discovery content, it is unclear when/if Warner Bros. Discovery’s digital streaming service Max will come to New Zealand. Newsroom’s Mark Jennings reported this week that Discovery’s temporarily reduced staffing numbers were now permanent. “In Auckland, there are barely enough experienced reporters on the roster to get through a seven-day cycle,” reported Jennings. The company would be relying on new shows fronted by Paddy Gower and, shortly, Paul Henry, to be successful.
A range of other media businesses, big and small, will also seek to shore up their commercial and audience business models in the wake of major economic challenges.
Are Media has just launched a paywall for its iconic Listener masthead but may need a stronger digital strategy for its lifestyle titles, including Woman’s Weekly, Woman’s Day and Australian Women’s Weekly, whose print readerships have remained remarkably resilient.
The New Zealand media landscape is diverse, and the snapshot above will be scenarios facing most owners and leaders. Smaller operators such as The Spinoff and Newsroom will undoubtedly be feeling the pinch, especially if sponsorships and NZ on Air funding for staff or projects start drying up. Like several other businesses, they both rely on reader donations, which will be challenged in a cost-of-living crisis.
* Disclaimer: Shayne Currie has a small NZME shareholding
Steve Tindall, in his weekly market report for GroupM, said net monthly advertising revenue (SMI data) was down, year-on-year, for the sixth month in a row.
In his market pricing section, he says a disparate trading strategy continues in the industry.
“Some media owners [are] choosing to try and hold their yields, hopeful of maintaining them until market norms return. This is obviously accompanied by positive market messaging.
“However, there is an increasing number that are choosing to trade their way out of the downturn.
“Whilst this is unsurprising, depending on how far away the recovery is, along with a determined effort to rebuild yields especially with fixed costs rising, by 2024 some media owners may find it difficult to continue.”
I followed up with Tindall this rather sobering commentary.
He said the scale of a media business – and the cash margin generated after all content, plant, talent and other fixed costs had been paid – affected the ability of a company to trade out of a decline for a sustained period.
“This also depends on each company’s gearing before the downturn began. The longer it continues, the greater the likelihood of some M and A [merger and acquisition] activity towards the end of Q1 2024.”
So, what about green shoots? When can we start to see some positive upturn?
The global GroupM report says the automotive and home electronics sectors should be advertising again more fully by year-end. It expects people will upgrade televisions and computers they bought at the start of the pandemic in early 2020.
The report also says publishers are increasingly becoming beneficiaries of political remedies.
The New Zealand Government is about to introduce a new online bill that will force major international digital players to contribute to the cost of producing the journalism they use on their platforms.
Google has already struck financial deals with several New Zealand news organisations, including NZME and Stuff.
Major international media firms are now going a step further, negotiating with the likes of Microsoft and Google for payment as their AI technology scrapes news websites.
The GroupM report says independent news and media organisations play a critical role in providing communities with responsible and trustworthy journalism.
“The shift to mobile phones, online search and social media has pushed news publishers into one of two main camps: either erect a paywall and push to grow subscriber revenue or maintain free access and rely more heavily on advertising. The recent dissolution of Buzzfeed News, the bankruptcy filing by Vice and the declining valuation of Vox — all adherents of the latter strategy — seem to negate its viability … "
With all his data and intel, Tindall believes the New Zealand market will improve in the second half of 2024 as house prices improve, domestic untradable inflation comes down and consumer confidence returns.
In the meantime, economic headwinds are driving change within media businesses – whether that’s personnel changes, cost-cutting or the way they sell and measure advertising.
It’s a point Tindall picks up.
“The smaller players could potentially fall over and the bigger players could expand into other channels.”
He says the idea that New Zealand’s media businesses – including the agencies – compete and fight with one another while the global digital giants “come silently around the outside” is “ridiculous”.
“There is a great concern of the available spend inside the market. Absolutely, everyone gets worried about that. Everyone worries about jobs and everything else.
“At the same time, the longer-term view takers go, ‘okay this means we have to change what we’re doing’.
“Change for some is frightening and some people don’t want it. But actually, change creates innovation, it creates passion and it creates involvement and people need to see change is happening because when the market is down, the status quo isn’t good enough.
“If people see that you are trying to change, they recognise the money is not there yet, but it creates a different level of involvement and engagement.
“Not all of your people, just to be really clear. Some people will be hanging on to the desk going, ‘why can’t it be 1985?’”
This week, we catch up with broadcaster and journalist Mihingarangi Forbes.
Can Tom Cruise repeat Top Gun’s extraordinary box office success with his latest Mission: Impossible movie?
The seventh instalment of the Mission: Impossible franchise has opened in New Zealand. The combination of our long Matariki weekend and movie-friendly weather should give the film a rocket-like launch in Paramount’s quest to overtake James Cameron’s Avatar: The Way of Water for New Zealand box-office takings in 2023.
Early reviews have raved about Cruise’s performance and the movie generally.
The Guardian gave it five stars, calling it an “outrageously enjoyable spectacle”.
The UK Daily Telegraph also handed out a maximum five stars. “Like last year’s Top Gun: Maverick, Dead Reckoning Part One feels like an attempt to save the blockbuster by blasting it back to first principles, at a time when the form is sunk in self-inflicted crisis. And while it lacks Maverick’s flawlessly sleek finish and unexpected warm touch, it matches it for action that’s both stunningly executed and strikingly classical in its approach,” wrote reviewer Robbie Collin.
I met with Mr. Christopher Hipkins, Prime Minister of New Zealand.
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) July 12, 2023
Thank you for your consistent, principled and value-driven support. It is very important that despite the geographical distance, we are extremely close in our understanding of freedom.#UkraineNATO33
🇺🇦🇳🇿
Sad news for the media industry with the untimely death of cameraman, producer and video expert Steven Orsbourn this week.
Orsbourn, who was only in his mid-50s, spent more than nine years at the NZ Herald. He had been at Sky TV for the past four years.
He freelanced at many other New Zealand media businesses over the years and was a widely respected and passionate cameraman, video production expert and leader.
NZ Herald deputy head of sport Cam McMillan was one of a specialist group of nzherald.co.nz journalists and editors who worked alongside Orsbourn.
“Ors was passionate about video and storytelling, a very supportive colleague, and a great person to have around the newsroom and on tour,” says McMillan.
“He and Susie Nordqvist landed in his hometown Christchurch in the days after the February earthquake in 2011 with no transport and unreliable cellphone coverage.
“They produced world-class video packages, which marked a big change for the Herald website as a larger focus went on video from then on. Fronting video became a new and often daunting experience for many journalists who came from newspaper backgrounds and Ors was the perfect director – forever patient, offered supportive advice and made you feel comfortable despite the bright lights and many cables around your feet in the first Herald studio which he built.
“Away from the camera, Ors embraced a zest for life. He had a twinkle in his eye. He loved a yarn, loved his mates, and brought an infectious enthusiasm wherever he went. The world is a poorer place for his absence.”
“Devastated by the news about Steven Orsbourn,” tweeted former Herald senior editor Jeremy Rees. “Lovely kind decent guy, loved his craft, always wanted to do the best, and wanted the best for others. Always there at the right time for a yarn and a beer. Set up the @nzherald video unit.”
Laura McGoldrick, Eric Young, Tim Murphy and Craig Norenbergs were among many others in the media industry who paid tribute.
* 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.
'I can imagine people being outraged that TVNZ signed a deal with me.'