• Written by Merja Myllylahti, Co-Director JMAD research center, Auckland University of Technology
New Zealand's commercial broadcasters are in trouble and the government is considering a complete restructure of public broadcasting. from www.shutterstock.com, CC BY-ND

New Zealand’s broadcasting sector, both public and commercial, is facing the biggest structural upheaval in a decade.

The latest report on New Zealand media ownership, compiled by the Journalism, Media and Democracy Research Centre, shows the country’s commercial television broadcasting sector is in serious trouble. In October, commercial TV broadcaster MediaWorks put its television arm up for sale. The pay-television company Sky TV invested heavily in rugby broadcasting rights, but without paying a dividend to shareholders.

Public broadcasting faces an even bigger change as the government ponders a complete restructure. The proposal is to disestablish both the public interest radio broadcaster RNZ (Radio New Zealand) and the commercially funded television broadcaster TVNZ to create an entirely new public media entity.

TVNZ chief executive Kevin Kenrick has argued the government’s intention is to “strengthen the public media – not weaken commercial media”. But the likely consequences will be the loss of hundreds of journalism jobs and less quality news.


Read more: Nine-Fairfax merger rings warning bells for investigative journalism – and Australian democracy


Doing nothing is not an option

The restructuring of state-owned broadcasting comes on the back of TVNZ’s earlier announcement that it will not pay a dividend to the government – even though its only mandate is to make a profit and pay that dividend.

The government is expected to announce its plans for the new public media entity before Christmas. Its advisory group has suggested TVNZ and RNZ operations should be disestablished and a mixed funding model used to support the new broadcasting company. A mixed model would allow the broadcaster to fund parts of its operations through advertising, sponsorships and partnerships. It remains to be seen if the government follows that advice.

The Swiss Broadcasting Corporation has a mixed funding model, but last month confirmed plans to reduce its workforce by 200 as one of several measures to tackle its financial crisis. Whatever broadcasting model emerges in New Zealand, Prime Minister Jacinda Ardern has said doing nothing is not an option.

In many countries, including Ireland, public broadcasters have already hit an “existential financial crisis”. In 2019, Ireland’s public broadcaster, RTÉ, warned it would not survive without a government rescue plan. In 2018, Danish public broadcaster DR announced up to 400 job cuts and closures of three television channels and three radio stations as part of a media reform package.

Commercial broadcasting in dire straights

New Zealand’s commercial broadcasting news operations are in serious trouble as a consequence of streaming services flooding the market. In this environment, monetising television viewers has become ever more challenging.

My research in digital journalism shows media companies and platforms compete for attention, which has become a scarce and fluid commodity.


Read more: Attention economy: Facebook delivers traffic but no money for news media


In this context it’s not surprising MediaWorks is trying to sell its television arm. At the time of writing, no buyer had emerged for the loss-making television business.

The pay-television company Sky TV is also struggling as it competes against telecommunications company Spark in sports broadcasting. Sky’s business model has been affected by a number of streaming services entering New Zealand (including Disney+ and Apple TV).

In November, Sky TV warned that its 2020 revenue will fall NZ$45 million compared to 2019. For the financial year 2019, the company did not pay a dividend to shareholders. Its share price fell 66% between November 2018 and November 2019.

Private equity influence

While the fate of public broadcasting is in the hands of the government, the future of the commercial television sector will be decided by private equity firms, investment managers and financial shareholders.

This means potentially more asset stripping, job cuts and restructuring of businesses. As many have observed, private equity firms have become ruthless media barons as they attempt to extract value out of already distressed media assets. Since 2011, the New Zealand Media Ownership reports have warned that media companies are vulnerable as private equity financiers do not have an interest in news or newsrooms.

In 2019, Australian Quadrant Private Equity and American Oaktree Capital have become joint owners of MediaWorks. Quadrant announced it was buying Australian outdoor advertiser QMS, which has a 40% stake in MediaWorks. Oaktree Capital remains the company’s largest shareholder with a 60% stake in the company. If MediaWorks’ owners fail to sell its television business, it will likely close, with hundreds of jobs at risk.

Two financial institutions, Scottish asset management firm Kiltearn Partners and British fund manager Jupiter Asset Management, are also the largest shareholders of Sky TV. The company is considering a restructure which could affect 250 jobs.

New Zealand’s media ecosystem may be on the verge of collapsing, not just in the broadcasting sector. The merger of New Zealand’s two largest news publishers – NZME and Stuff – is back on the agenda. Back in 2017, the Commerce Commission rejected the merger, but as media company profits and revenues continue to shrink, NZME confirmed last month it was in talks with Nine Entertainment to buy Stuff.

Should the merger go through this time, it would bring massive job cuts and most certainly less quality news coverage in New Zealand.

Merja Myllylahti does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Authors: Merja Myllylahti, Co-Director JMAD research center, Auckland University of Technology

Read more http://theconversation.com/job-losses-expected-as-nzs-broadcasting-sector-faces-biggest-overhaul-in-a-decade-128447

All You Need to Know About Trenchless Technology

For many years, the traditional sewerage lines and pipe developments were not enough due to the long wait and cracking. The traditional sewer pipe repairs involved cracking the earth to find the par...

News Company - avatar News Company

Before we rush to rebuild after fires, we need to think about where and how

A primary school in East Gippsland was burnt down in the current bushfire crisis. While Premier Daniel Andrews immediately committed to rebuilding the school as it was, media reported the local CFA ca...

Mark Maund, PhD Candidate, School of Architecture and Built Environment, University of Newcastle - avatar Mark Maund, PhD Candidate, School of Architecture and Built Environment, University of Newcastle

Australian sea lions are declining. Using drones to check their health can help us understand why

Australian sea lions (Neophoca cinerea) are one of the rarest pinnipeds in the world and they are declining. Jarrod Hodgson, CC BY-NDAustralian sea lions are in trouble. Their population has never rec...

Jarrod Hodgson, PhD Candidate, University of Adelaide - avatar Jarrod Hodgson, PhD Candidate, University of Adelaide

With costs approaching $100 billion, the fires are Australia's costliest natural disaster

It’s hard to estimate the eventual economic cost of Australia’s 2019-20 megafires, partly because they are still underway, and partly because it is hard to know the cost to attribute to de...

Paul Read, Climate Criminologist & Senior Instructor/Lecturer, Faculty of Medicine, Monash University - avatar Paul Read, Climate Criminologist & Senior Instructor/Lecturer, Faculty of Medicine, Monash University

In cases of cardiac arrest, time is everything. Community responders can save lives

Cardiac arrest can occur with little or no warning in people who were previously healthy, including young people. From shutterstock.comEach year more than 24,000 Australians experience a sudden cardia...

Bill Lord, Adjunct Associate Professor, Monash University - avatar Bill Lord, Adjunct Associate Professor, Monash University

So the government gave sports grants to marginal seats. What happens now?

When Australians pay their income tax, they assume the money is going to areas of the community that need it, rather than being used by the government to shore up votes for the next election. This is...

Maria O'Sullivan, Senior Lecturer, Faculty of Law, and Deputy Director, Castan Centre for Human Rights Law, Monash University - avatar Maria O'Sullivan, Senior Lecturer, Faculty of Law, and Deputy Director, Castan Centre for Human Rights Law, Monash University

The Olympics have always been a platform for protest. Banning hand gestures and kneeling ignores their history

It is the year of the Tokyo Olympics, and the International Olympic Committee was quickly out of the blocks with new guidelines regarding athlete protests. The IOC is worried the biggest stories of...

David Rowe, Emeritus Professor of Cultural Research, Institute for Culture and Society, Western Sydney University - avatar David Rowe, Emeritus Professor of Cultural Research, Institute for Culture and Society, Western Sydney University

Where Can You Get Weed By Ordering It Online?

Nowadays, everyone wants to get their hands on some weed. Marijuana has become legalized in a lot of countries worldwide. People wait in lines for days to buy some. You couldn’t have imagined that...

News Company - avatar News Company

Hidden women of history: Catherine Hay Thomson, the Australian undercover journalist who went inside asylums and hospitals

Catherine Hay Thomson went undercover as an assistant nurse for her series on conditions at Melbourne Hospital. A. J. Campbell Collection/National Library of AustraliaIn this series, we look at under...

Kerrie Davies, Lecturer, School of the Arts & Media, UNSW - avatar Kerrie Davies, Lecturer, School of the Arts & Media, UNSW

Sick and Tired of Your Dead End Job? Try Teaching!

Tired of the same old grind at the office? Want an opportunity to impact lives both in your community and around the world? Do you love to travel and have new experiences? Teaching English is the perfect job for you! All you need is a willingness to ...

News Company - avatar News Company

The Impact of an Aging Population in Australia

There’s an issue on the horizon that Australia needs to prepare for. The portion of elderly citizens that make up the country’s overall population is increasing, and we might not have the infrastructure in place to support this. Australians h...

News Company - avatar News Company