There are rumblings across the Tasman over the state of New Zealand’s media industry, and some wealthy Kiwis are said to be plotting to do something about it.
Tired of the poor performance of NZME, and complaints from the business community over the quality of the publisher’s content, there’s chatter that a privatisation may be on the cards where the new owners could shape the editorial direction of NZME’s flagship publication, The New Zealand Herald.
Media experts across the Tasman say it focuses too much on lightweight “clickbait” and lacks value.
Others have highlighted what they say is a clear lack of editorial direction, and the paper should make a strong statement of what it stands for.
People who could emerge as potential candidates to assert greater influence over the business include wealthy Kiwi entrepreneur Nick Mowbray. Others say a Canadian billionaire who resides in New Zealand is eager to get involved.
Mr Mowbray founded consumer products manufacturer Zuru.
The company, which has a $1bn annual turnover, became successful globally through selling toys such as Robo Fish and Bunch O Balloons, which was the top selling toy in the US for three months in 2016.
It has been reported that Mr Mowbray, 39, has donated money to New Zealand’s right-of-centre ACT Party.
Should he have interest in taking on NZME, his play could be compared to Tesla billionaire Elon Musk’s buyout of Twitter, which he renamed X.
Mr Musk supported Donald Trump in his election campaign and the US President has appointed him head of the new Department of Government Efficiency.
Meanwhile, following profit warnings, NZME has been on a major cost cutting drive in its newsrooms to boost performance. It is cutting 40 jobs from the New Zealand Herald, including 14 reporters and a large number of production roles.
The share price of NZME has traded sideways for three years. It is currently at 93c with a $179m market value.
Pressure is mounting on board members, say sources, with at least one North American investor on the register eager for change.
No doubt the results will be closely watched when it reports next Wednesday.
Among NZME’s shareholders are Australian institutional investors Spheria Asset Management with 19 per cent and Pinnacle Investment with 10.9 per cent.
NZME owns successful radio stations such as Newstalk ZB, and an online real estate website, and a raft of other publications.
It warned in November of slowing revenue growth and that its earnings before interest, tax, depreciation and amortisation was expected to be at the lower end of its previously guided range of $NZ57m to $NZ61m ($51.3m to $54.8m).
It said the delayed economic recovery and advertising revenue was weighing on performance, although advertising revenue had improved.
It revised its EBITDA guidance to $53m to $55m for its 2024 financial year.
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