Kiwis offer a glimpse of Nine-Fairfax future

New Zealand’s MediaWorks provides a glimpse of what a merged Fairfax Media and Nine Entertainment might look like.

Michael Anderson, head of New Zealand media company MediaWorks. Picture: John Feder.

New Zealand’s MediaWorks provides a glimpse of what a merged Fairfax Media and Nine Entertainment might look like.

The AM Show, its breakfast radio show on RadioLive, doubles as a breakfast TV show on its flagship Three television station; drive­time radio announcers “Jono and Ben” on the Edge also do a TV comedy show; and Three’s Dancing with the Stars is presented by radio and TV personalities from elsewhere in the MediaWorks ­stable.

“We’re integrating our product a lot more so that our listeners and our viewers can just move seamlessly through all platforms,” says Michael Anderson, chief executive of the TV, radio and digital media group, which resulted from a 2004 merger. They are also trying to sell advertising across the platforms and have integrated all the newsrooms into a single entity, Newshub. What was previously TV3 News, for instance, is now Newshub at 6.

“It’s creating those opportunities which makes Newshub the highest-reach news in New Zealand because we’re able to work every platform, whereas our competitors have a platform that they’re on with their news — whether it be Herald or Stuff or TVNZ,” Anderson says. “Those are the ways that we’re learning how to leverage the assets.”

His comments come after Nine Entertainment CEO Hugh Marks, who will lead the new entity after the merger with Fairfax, said there was no intention to merge the two newsrooms.

Anderson, who was a Sydney-based director of Fairfax Media for six years before he took up the MediaWorks top job in 2016, says this is unsurprising.

“I don’t think they’re silly enough to predict what it could be and then hold themselves accountable to doing something that they might change their mind on. I think that comment is probably a very astute one because it’s simply going ‘we don’t have a plan on this and let’s just let it unfold’,” he says.

“I see the mastheads and I see the Nine news machine as business as usual. They’ll bring those together and they’ll make their efficiencies and their effectiveness and they’ll leverage all of those things.”

He says the Fairfax mastheads will provide the” bread and butter” for the merger but the Stan streaming service and Domain property listings businesses are the two prizes. They will benefit enormously from the scale of the new entity and provide the growth.

The Nine-Fairfax merger has also given rise to speculation that MediaWorks might buy Fairfax’s New Zealand newspaper business, Stuff. Fairfax New Zealand is already in play and plans to merge with print and radio owner NZME. The merger — which has been dubbed StuffMe — has been blocked by the New Zealand Commerce Commission and a court appeal is expected to be decided later in the year.

Anderson says he can see why there is “logical speculation” about MediaWorks buying Fairfax, but says there is no current process and won’t comment further.

Nonetheless, when the StuffMe merger was blocked in May, MediaWorks welcomed the decision, saying it “opens the door for other opportunities” for local media partnerships.

Anderson explains what they meant: “In a world where every single moving part is moving at speed and in directions you can’t always anticipate, what we need is complete optionality. It wasn’t because we have something in mind.”

MediaWorks already has a long history as a combined entity. It was formed by Canada’s Canwest in 2004 by combining separate TV and radio assets. After a period of private equity ownership and falling into receivership, it was bought by US private equity firm Oaktree Capital Management in 2015.

Since Anderson took over he has narrowed losses from $NZ14.6 million in 2016 to $NZ5.6m last year and is hoping to turn around the loss-making TV stations and break even this year.

While there is periodic speculation that Oaktree has put Media­Works up for sale, Anderson says there is no current plan, but it is inevitable the business will be sold one day because that is how private equity operates.

“There’s two ways to sell. One is to actively go on the market and we’re not on the market. Then, another one is, of course, opportunistically — every now and again, people will knock on your door and you will entertain it or not,” he says. “If we were planning to sell, we would be on the blocks, and we’re not.”

While there are similarities, there are also key differences between the media landscape in Australia and New Zealand. In New Zealand there are just two TV networks, two print companies and two radio networks.

“That took a little bit of getting used to — the fact that you’ve only got one competitor and you either win or you lose. You’re either taking share off them or they’re taking share off you,” says Anderson, who was chief executive of radio network Southern Cross Austereo for 20 years.

There is also no public service broadcaster in New Zealand. TVNZ is fully government-owned but also fully commercial and aims to return a dividend to the government every year. Nonetheless, Anderson says the support TVNZ has received from the government over the years has put it in a very strong position and MediaWorks’ TV3 is a challenger, in the same way that the Ten Network is challenging Nine here.

Anderson is more concerned about a government plan to give a TV licence to Radio New Zealand, the government-owned radio network that operates separately from TV3.

It has given him a new perspective on complaints from media organisations in Australia which are concerned about the ABC and SBS expanding into new media.

“It can be very real here.”