Bauer local future up in the air after NZ magazine business shut
Bauer is understood to have hired EY to review its Australian business, in the wake of closing its New Zealand magazines.
Bauer Media’s future in Australia is up in the air, with the magazine publisher understood to have hired EY to review its business, which is locked in a deal to buy Pacific Magazines from Seven West Media for $40m, following the closure of its New Zealand operations.
The German-owned family business is considering exiting the market, which it entered in 2012 by acquiring Kerry Packer’s ACP Magazines for $500m, as part of the strategic review by accounting and advisory firm EY’s Stewart McCallum.
Bauer has remained tight-lipped on its Pacific plans since the deal was approved by the nation’s competition regulator last week.
Chief executive Brendon Hill hasn’t returned several calls seeking comment on the merger, while cash-strapped Seven, which is controlled by billionaire Kerry Stokes, is understood to be confident that the deal will go ahead at the current price as scheduled on April 9.
The tie-up would see Bauer’s 36 titles, including Women’s Weekly and Woman’s Day come together with Pacific’s roughly 20 mastheads such as New Idea and That’s Life!
The Australian media industry, which also includes News Corp Australia (publisher of The Australian), Nine Entertainment, Prime Media and Australian Community Media, is hurting from the accelerated drop in advertising revenue from the COVID-19 crisis.
Even before the coronavirus pandemic, the industry was battling big technology giants, like Google and Facebook for advertising clients in an uneven playing field. Media bosses are urging the federal government to act swiftly now to crack down on the US-based tech giants, and make them pay for the news they carry on their platforms.
Bauer on Thursday blamed the closure of its New Zealand business on the “severe economic” hit of the coronavirus.
The company said its New Zealand business had suffered since magazine publishing was suspended in the country, as part of the government’s decision to move to level four COVID-19 restrictions.
Mr Hill said Bauer understands the New Zealand government’s decision but it has put its business in “an untenable position” and it would close on Thursday, with 237 staff to be made redundant.
“Publishing in New Zealand is very dependent on advertising revenue and it is highly unlikely that demand will ever return to pre-crisis levels,” he warned.
Bauer said it had carried out an urgent review of its New Zealand operations and considered all options to keep part or all the business open, including talking with the New Zealand government. “An active search is underway to find buyers for our New Zealand assets, including our many iconic titles, however, so far an alternative owner has not been found,” Mr Hill said.
Bauer Media NZ publishes entertainment, lifestyle and current affairs titles including the NZ Listener, Woman’s Day, New Zealand Woman’s Weekly, North and South and Next, plus a digital network.
Bauer said EY will help “facilitate an orderly wind-down of the business”, and funding will be provided to enable all staff to be paid their full redundancy and leave entitlements.
“I would like to recognise the impact that this decision will have on our suppliers, customers and the wider publishing industry. This is a very difficult time for the entire media industry,” Mr Hill said in a statement.
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