Commercial broadcasting company MediaWorks has agreed to sell its television channels to Discovery Inc. The global entertainment company will become the biggest privately-owned player in New Zealand free-to-air TV industry in 2021.
Michael Anderson, MediaWorks chief executive. Photo: supplied
MediaWorks has been trying to sell its TV arm - including the free-to-air channel Three (formerly TV3) - since last year.
MediaWorks also owns half the country’s radio stations which have been profitable in recent years while the TV operations have lost money.
The deal will also include the news service Newshub, and on-demand platform 3Now.
Bravo, an entertainment channel jointly-owned with US-based NBC Universal, and The Edge TV and The Breeze TV - music channels attached to MediaWorks radio stations - are also part of the deal.
MediaWorks says the sale is expected by the end of the year, subject to “a number of pre-completion approvals.”
Discovery already owns two free-to-air channels here. Choice, set up by local producers in 2012, was sold to a Canadian media company Blue Ant Media two years later which also introduced lifestyle channel HGTV. Discovery Inc acquired both channels without fanfare in 2019.
Discovery also has pay-TV channels here on Sky TV, including Discovery Channel, TLC and Animal Planet.
What is Discovery?
Discovery Inc began as a content creation company making documentaries, natural history programmes and entertainment shows.
In the 1990s, Discovery Channel began launching its own channels for cable TV and subscription platforms and taking over other creators of “real life entertainment.”
In recent years it has also invested heavily in digital innovation and online distribution. Growing its slate of broadcast outlets and platforms across the world in markets big and small has gone hand-in-hand with its programme-making and digital content creation.
Who will be in charge?
MediaWorks CEO Michael Anderson had already announced he would step down by the end of this year once the sale of the TV channels was agreed.
Today’s announcement says MediaWorks current commercial director Glen Kyne - also the current chair of umbrella group Think TV - is now general manager of TV and he will continue in that role when Discovery takes over.
Discovery’s Asia-Pacific operations have offices in Australia, but he will report to Discovery’s New York based president for the region, Simon Robinson. The statement says Discovery's Sydney-based general manager for Australia, New Zealand and Pacific Islands Rebecca Kent will oversee free-to-air channels Choice and HGTV and Discovery’s pay-TV channels here.
Good news for the staff, stars and viewers?
After years of financial instability under the ownership of private equity funds, repeated refinancing and several months up for sale - during which there was speculation the TV channels could close before Christmas last year - MediaWorks TV staff will be relieved.
In 2019, Michael Anderson complained bitterly about government media policy cementing sate-owned TVNZ's pre-eminence in free-to-air TV. Covid-19 caused an immediate slump in revenue in March this year.
“It’s a cliff we can’t see the bottom of. It’s dark,” Michael Anderson told Parliament's Pandemic Response Committee in April.
Any local media companies still pondering a play for MediaWorks TV would have shelved their plans at that point.
But Discovery Inc is a business which earned US$11 billion last year and has a track record of investment and innovation.
But its commitment to local content is unknown. News and local entertainment shows have been a critical part of the mix since TV3 was first established 30 years ago.
Many are publicly-funded by NZ On Air, but they are costly to make and don’t always pull a crowd. Very few of the top-rating free-to-air local shows appear on MediaWorks TV.
Discovery will certainly want to put the company’s own shows on its new channels in 2021.
But the current and prospective bosses were making the right noises though in today's announcement.
“Under the ownership of Discovery, Three, Newshub and Bravo will have a long-term home and continue to play a vital role in New Zealand society,” said MediaWorks CEO Michael Anderson.
“We are committed to drive MediaWorks TV’s future growth and success, delivering increased value to audiences and advertisers across all screens in New Zealand,” said APAC head Simon Robinson.
“Our very talented teams continue to focus on bringing New Zealanders trusted, local news and current affairs and quality entertainment content,” said Glen Kyne.
The splitting of radio and TV operations will also create problems to solve by 2021.
Newshub was created in 2017 to serve MediaWorks radio, TV and online platforms. The AM show was designed to occupy the breakfast slot on Three and talk radio.
At the time, it was a signal MediaWorks' owner had no interest in splitting off the profitable parts of the company from the TV bits.
But an awful lot has changed in the media industry since then.