For three decades, TVNZ has sponsored New Zealand’s annual marketing awards - organisers are defending themselves after dropping the state broadcaster in favour of Google-owned YouTube; Big changes in MediaWorks’ shareholding as former CEO Cam Wallace sells down; Revealed - details of Newshub-TVNZ news service discussion.
The press release announcing a new naming rights sponsor for the country’s prestigious annual marketing awards was gushing. Organisers were “delighted” to be bringing on board Google-owned YouTube as the main sponsor.
And who can blame them? In this day and age, event organisers would be pleased to secure any significant sponsorship, let alone an enhanced deal.
But behind the scenes, the news - and the way it was confirmed - has left a sour taste at longtime sponsor TVNZ and in some corners of the commercial world. If there was an award for worst-timed PR move of the year, this might be a contender.
TVNZ has sponsored the New Zealand Marketing Awards for the best part of three decades. While the media industry is often (and rightly) accused of having too many awards events, this has been one of the sector’s most enduring partnerships.
The annual awards are a glamorous affair, with prizes such as overall supreme award, marketer of the year, marketing team of the year and various categories for best marketing campaigns. Last year, one of its biggest stars, Seven Sharp host Hilary Barry, hosted the awards, attended by almost 1000 people.
A blindsided TVNZ confirmed to Media Insider it wanted to continue its sponsorship this year.
“We were disappointed to learn the NZ Marketing Awards had appointed a global tech giant as its naming partner, in favour of a local media organisation,” says a TVNZ spokeswoman.
“Our local media industry is clearly under immense strain, and at a time like this, it’s incredibly important that we back our local providers.
“It is TVNZ’s view that negotiations were still open and ongoing when we learned YouTube had been appointed as naming sponsor.”
The Independent Media Agencies organisation (IMANZ) is even stronger in its criticism of the new deal.
“My role at IMANZ is fundamentally about supporting our members by championing the value of independent media agencies, and part of that is supporting the local, independent media ecosystem more broadly,” says IMANZ general manager Kath Mitchell.
“Any move that undermines the profile of our local media ecosystem, particularly at a moment like this, is disappointing.
“Speaking personally as somebody who has also recently left TVNZ, I think it’s a great shame to see a partnership that has been in place for more than 30 years be flogged to the highest bidder - a global giant - before local media partners [including the very long-standing incumbent] had a chance to respond. It’s certainly not how I’ve conducted business in this close-knit industry over the years.”
But the event organisers and owners - the Marketing Association and SCG Media, publisher of NZ Marketing magazine - have defended their decision.
“TVNZ were provided first right of refusal to the partnership even though no contract was in place,” says Marketing Association chief executive John Miles.
“As the fee had increased due to costs escalating to produce an event of the quality and standard the industry have come to expect, TVNZ indicated that the sum asked for was over what they had budgeted. As a result of this, they were told that the partnership would need to go to the open market.”
Miles said SCG could not afford to run the event at a loss, which would have been the case if the fee had not increased, and association members “would certainly not want MA to run the event at a loss”.
He did not directly respond to TVNZ’s comment that it viewed the negotiations as still ongoing when the YouTube sponsorship was announced.
The press release announcing the new sponsorship was sent on March 20, as the state broadcaster was consulting staff over plans to cut up to 68 jobs - including 35 in its newsroom - and the axing of shows such as Fair Go and Sunday. Those plans were confirmed last week.
While it is cutting costs, TVNZ obviously saw business value in supporting the local commercial industry through sponsoring the awards. It had clearly ring-fenced funding for the event - undoubtedly tens of thousands of dollars although no one is specifying the value.
The TVNZ spokeswoman said: “Given our role in providing New Zealand’s largest local advertising platform, the NZ Marketing Awards has been an event we’ve been proud to support over many years.”
However, Miles felt Media Insider was trying to paint Google - which, along with Facebook and other global tech giants takes about 90 cents of every $1 in digital advertising revenue out of New Zealand without paying what many consider a fair level of tax or acknowledgement of the role of journalism that sustains their business models - “as a villain here”.
They were not a villain, he said.
“Their support [has] allowed us to continue with awards at a standard which is expected and is fitting for our industry. Media habits have changed and to say they have undermined the media industry is fallacious - as technology changes, so do people’s habits on how they consume media.
“Uber changed the way people purchase external transport - should they be excluded from supporting events as well because they have eroded taxi companies’ market share?”
In my opinion, that comment conveniently ignores the fact that Uber provides the service that taxi companies once did, whereas Google and Facebook don’t actually hire journalists and provide their own journalism - they ride off the back of New Zealand companies’ investments.
Miles would not reveal how much Google/YouTube paid to be the main sponsor.
He’d heard only one piece of negative feedback about the arrangement.
“I have had one media company [a media supplier not agency] talk to me that we had ruffled some feathers, in their words. Independent agencies [media buyers] have not supplied any feedback. We have however had a ton of positive feedback from many senior marketing executives.”
Asked bluntly if this was a way of getting more money out of the global tech giants, Miles said: “We don’t work in the manner suggested here. We work with organisations in order to produce outcomes that help marketers be brilliant in what they do and to celebrate this.”
The founder of Lassoo Media & PR, Bridgette Smith, told Media Insider that on one hand, she understood the Marketing Association would manage its “sustainable future, with sponsorship as a significant revenue stream”.
On the other hand, as an industry-wide issue, it was another blow.
“It’s a bitter pill to swallow, where large international companies, with their global financial structures create an unfair playing field - an ongoing issue that can only be resolved by the Government.
“We know that advertising dollars fund local media production, and it is coming to a point where brands need to realise that their media investment decisions have a direct impact on the sustainability of news and journalism in New Zealand.”
The Marketing Association was politically neutral, Miles said. While he could understand people’s “frustrations”, this was an issue with the Government and “not something we can address”.
Asked what he said to agencies critical of the new sponsorship, he said: “Are they currently working with Google and YouTube to reach their audience? Marketers use YouTube as it is the way for their brand to connect with consumers in an effective manner.
“All of NZ are concerned with job losses but if an organisation cannot make what they do commercially viable this is a consequence whatever industry you are in. I am sure that IMANZ, who have criticised this partnership, have their members specifying YouTube and Google on a daily basis to reach their clients’ objectives.”
Google New Zealand country director Caroline Rainsford said the company had been a partner with the Marketing Association for many years.
Through a spokeswoman, she did not directly address the controversy over TVNZ but said: “At YouTube we’re proud to play our small part in recognising the incredible, innovative and inspiring work that has come out of our local marketing industry.”
A substantial change in the shareholding of radio and outdoor business MediaWorks has been revealed.
According to Companies Office records, MediaWorks shareholder Quadrant Private Capital has increased its ownership stake from 40 per cent to just under 55 per cent, while Oaktree Capital Management’s shareholding has dropped from 60 per cent to just over 45 per cent.
A third shareholder, former MediaWorks chief executive Cam Wallace - now one of the top bosses at Qantas in Sydney - has sold down more shares in his former business.
According to the Companies Office, Wallace has sold just over 3.426 million shares and retained 3.045 million shares - just under 0.5 per cent of the business.
Wallace, who enjoyed a stellar, 19-year career at Air New Zealand before joining MediaWorks in early 2021 and then Qantas last year, confirmed the selldown.
“Yes, I have exercised my option to sell the majority of my shares back to the company,” Wallace told Media Insider yesterday. “No particular reason on timing. Thought it was appropriate to sell back given I’m out of the business and the industry.”
A MediaWorks spokeswoman said yesterday she would need to speak to directors before providing comment.
Last year, auditors PWC said a “material uncertainty” existed that might cast “significant doubt” on whether MediaWorks could continue as a going concern, but the media company rejected any suggestion of an uncertain future.
“Shareholders and management have every confidence in the future of the business,” MediaWorks said in a statement at the time.
“PwC has issued us an unmodified opinion on the financial statements which have been prepared on a going concern basis.”
MediaWorks - which owns some of New Zealand’s biggest radio music stations including The Breeze and More FM as well as an outdoor advertising business - incurred a loss of $125.9 million in the financial year ended December 31, 2022, following a $110m impairment. As of that date, the group’s current liabilities exceeded assets by $19.4m.
Despite the impairment and financial challenges, MediaWorks chief executive Wendy Palmer earlier told Media Insider that the company was “seeing green shoots” with quarter-four revenue last year.
“It’s feeling good. We are happy with the way the future’s looking and where we’re positioned.”
There were no plans to sell any assets or split the company.
“We think we are stronger together in terms of the current structure,” Palmer said. “The breadth of our portfolio is really great - it’s great for our clients and great for our teams internally. There’s nothing on the radar in terms of any change.”
TVNZ has released heavily redacted information about a meeting called by Warner Bros Discovery in February to discuss a possible new news agency involving the two TV networks and RNZ.
The meeting was held in Auckland on February 21. Warner Bros Discovery proposed a single news service for the three operators, according to an internal TVNZ file note released to Media Insider under the Official Information Act.
The note, written by TVNZ chair Alastair Carruthers, who attended the meeting, said the proposed news service was “akin to the former NZPA and current UK-based ITN”.
“It would produce content that could be broadcast/ streamed by all three parties. There is no written proposal or slide deck or detail about how it would work.
“In discussion, WBD [Warner Bros Discovery] confirmed [it] would not be in a position to invest in the vehicle. It would not be a JV - except between TVNZ and RNZ if they wished to combine to create it.
“WBD would only pay a fee to the new vehicle to procure and transmit news.”
Carruthers said it was proposed the new news service could hire “from all three newsrooms and WBD could contribute to the restructuring costs of all parties, but not invest in the vehicle”.
The document reveals six people were at the meeting - Warner Bros Discovery New Zealand boss Glen Kyne and communications consultant David Cormack; TVNZ CEO Jodi O’Donnell and Carruthers; and RNZ CEO Paul Thompson and senior executive Glen Scanlon.
Carruthers’ file note says: “[Thompson] suggested the process would take up to 12 months, with three months required to outline and agree key terms, and 9 months to implement change and establish the new vehicle.”
The file note said Kyne had asked for TVNZ’s preliminary thoughts about the proposal but both Carruthers and O’Donnell “declined to comment”.
A day after the meeting, the TVNZ board rejected the proposal - which Kyne said was “baffling” and “disappointing”.
A week later, Warner Bros Discovery announced a proposal to disestablish Newshub - these plans were confirmed last week, with the loss of almost 300 jobs.
TVNZ also later announced its own news cutbacks, with the closure of Sunday, Fair Go and the Midday and Tonight bulletins.
TVNZ earlier said of the news agency proposal: “We had an initial discussion with Warner Bros. Discovery and RNZ [at Warner Bros Discovery’s request]... on how we might work together in news.
“This discussion was preliminary, but would have seen TVNZ take on significant cost and risk of a new service, so we informed Warner Bros Discovery that we were not in a position to advance any talks.”
“We were not told of Warner Bros Discovery’s plans to disestablish Newshub,” said a TVNZ spokeswoman at the time.
A Warner Bros Discovery spokesman would not comment last night on the details of the file note.
'I can imagine people being outraged that TVNZ signed a deal with me.'