RNZ-TVNZ possible merger: Government green-lights a study looking into the creation of a new size public media company

The Government has officially begun looking into the creation of a super-sized public media entity, likely combining TVNZ and RNZ into one company.

Broadcasting Minister Kris Faafoi said this morning that Cabinet has approved the creation of a business case which will look into the formation of a new public media entity.

Accountancy firm PwC has been hired by ministers to carry out the work, which is due back around the middle of this year – before the September election.

"Change is hard, but I think there is some excitement in this too," Faafoi said in a speech at the Christchurch Broadcasting school this morning.

If approved, the new entity could be in operation as soon as 2023.

National has already threatened to torpedo any government plans for a TVNZ/RNZ merger, meaning the new entity will likely be a key election issue.

Both entities welcomed the decision – RNZ boss Paul Thompson said the broadcaster was looking forward to contributing to the business case.

"We're encouraged that the Government is aware of the tough challenges facing all local media and of the need for increased investment in independent and trusted public media if New Zealand is to continue to be a well-informed, cohesive and connected democracy," he said.

Faafoi said the "unprecedented challenges" media organisations face were well known, citing increased competition from Google and Facebook, as well as declining revenue shares.

"That presents risks for the future viability of New Zealand's public broadcasting operators, RNZ and TVNZ, and the Government needs to address those risks," he said.

The final decisions about the future of RNZ and TVNZ would be made once the business case was completed, Faafoi said.

He was giving little away in his statement, other than the fact the new entity would be an "independent multiple-platform, multi-media operation".

"It is about establishing the best way of providing New Zealanders with a range of trusted news, information and entertainment that reflects New Zealand – its diversity, history and aspirations. At the same time, we need to ensure any new public entity has the flexibility and the strength to meet future change and challenges."

He confirmed NZ On Air would continue to have an important role to fund local content for both commercial and non-commercial media outlets.

Faafoi said the Government must ensure New Zealanders have a strong independent public media service for decades to come.

"[A service] which means ensuring public media assets are fit for the future and able to thrive amid the changing media landscape."

Faafoi's announcement comes as the Government considers a proposal which would see NZME – which owns the Herald – buy Stuff.

Although an attempted merger between the two companies has already been blocked by the Commerce Commission, NZ First leader Winston Peters has thrown his support behind the idea.

"My party's fundamental position is that the role of the fourth estate is essential," Peters said at the end of last year adding that the industry was in "dire straits" with advertising revenue falling, local newspapers closing and reporter numbers falling.

He cited social media giants such as Facebook and Google making large profits by "suffocating" New Zealand media companies.

TVNZ boss Kevin Kenrick welcomed the announcements made by Faafoi today.

"It's encouraging to see Minister Faafoi acknowledge the challenges confronting local media and coming up with potential solutions to strengthen public media," Kenrick said.

"TVNZ will support the minister and officials working on the business case over the coming months to assess the viability of the proposed new public media entity."