NZME boardroom clear-out puts Aussie execs in spotlight

Activist investor James Grenon wants to shake up the Australian listed NZME, owner of the NZ Herald and Newstalk ZB. Picture: iStock

NZME’s billionaire activist investor says he has strong support for a full boardroom clean out of New Zealand’s largest media company, in a move likely followed by the appointment of consultants to assess how to shake up the country’s flagship newspaper.

Private equity tycoon James Grenon said in a letter to the company that he has backing from 37 per cent of NZME’s investors to sack the board and vote in new directors at its upcoming annual general meeting. It could see chief executive Michael Boggs, who raked in almost $NZ3m in annual pay in 2023 and almost $NZ2m last year, under pressure.

NZME boss Michael Boggs.

NZME is listed in both Australia and New Zealand and Mr Grenon, a Canadian billionaire living in New Zealand, who has some right of centre digital publications, is asserting control after it emerged this week he has amassed more than 9 per cent of the stock.

New directors could move to appoint a consultant to assess what direction the loss making publisher and broadcaster needs to take to be placed on more sure footing, sources say.

The understanding is that the group’s future could involve further investment in editorial content at the expense of cuts to excess costs in other parts of the business.

Its earnings before interest, tax, depreciation and amortisation went backwards in print and digital publishing for 2024, when it posted a $NZ16m loss – one of its worst ever results – in a tough economy.

It comes in an environment where publishers globally are moving to abandon plans to produce print editions of newspapers and focus on digital only models, with rising costs of the commodity pulp weighing on the industry.

NZME is the publisher of the largest newspaper across the Tasman, The New Zealand Herald, and also owns the country’s most successful commercial radio network following a company merger several years ago, including the successful talkback station NewstalkZB.

NZME owns The New Zealand Herald and several radio stations. Picture: iStock

With this, along with other publications, including regional newspapers, it has over 200,000 subscribers.

It also owns online real estate business One Roof, which is subject to a strategic review by investment bank Jarden that could see the business demerged or sold in the medium term to a global peer like CoStar, currently bidding for Domain Group.

Australian media experts with previous experience in the New Zealand media industry could be tapped for positions to reshape the company, being dragged down by its publishing arm and flagship paper, heavily criticised for the quality of its content.

Among the obvious candidates are Michael Anderson, the former oOh! Media chairman and Austero CEO, who also ran New Zealand media company Mediaworks for a period.

Another is ex MediaWorks executive director and former Prime Media Group boss Ian Audsley.

However, it is believed to be early days and likely have not yet been approached for roles.

As a private equity expert with a skill in turning around distressed companies, one option is Mr Grenon brings in experts from his private business, Tom Capital, as directors.

DataRoom revealed a boardroom shake-up was looming this week, with Mr Grenon to assert more control.

The four new directors that would include Mr Grenon would be voted upon at the Annual General Meeting on April 29 before a fifth director would be chosen by the board.

NZME’s largest two shareholders on the ASX include Spheria Asset Management, with 19.9 per cent and Pinnacle Investment with 11 per cent, according to Bloomberg.

It comes as US-based hedge fund Osmium Partners, which holds 6.6 per cent of the stock and has previously targeted Australian listed online marketplace Redbubble for activism, has put forward additional nominations for the appointment of two new directors, separate to Mr Grenon’s nominations.