Tycoon James Grenon pledges to haul NZME out of the mire

James Grenon’s campaign to bring about a complete refresh in the top ranks of the loss-making publisher and broadcaster is gathering momentum.

Pressure is building on directors from New Zealand’s largest media company NZME to quit ahead of its annual shareholder meeting to avoid a humiliating defeat over a billionaire activist investor’s push to sack the board.

Pressure is building on directors from New Zealand’s largest media company, NZME, to resign before its annual general meeting next month to avoid a humiliating defeat over a billionaire activist investor’s push to sack the board.

James Grenon’s campaign to bring about a complete refresh in the top ranks of the loss-making publisher and broadcaster is gathering momentum.

Lifting NZME’s poor performance, cutting what he says are excessive corporate costs and improving the quality of journalism at the country’s flagship newspaper, The New Zealand Herald, are some of his stated objectives.

In a recent letter to the media company’s board, he has hit out at the $NZ2m ($1.8m)-plus average annual pay packet of chief executive Michael Boggs. Mr Grenon believes he has support from shareholders who hold at least 47 per cent of the stock to sack the whole board.

NZME boss Michael Boggs.

The Canadian-born private equity tycoon, who has resided in New Zealand since 2012 and has made a fortune turning around distressed companies, has recently spent about $NZ9m to lift his stake in NZME to 9.8 per cent.

Mr Grenon is proposing to appoint four new directors, including himself.

He would be chairman under the plan, and the new board would also appoint a fifth director.

NZME, which owns The New Zealand Herald, the country’s largest radio network, including Newstalk ZB, One Roof and a raft of other publications, reported a $NZ16m loss last year in what was one of its worst ever results, weighed down by a decline in earnings in its digital and print publishing business that was hit with a $NZ24m impairment on its publishing division.

Left leaning politicians, media outlets and the media union, E tu, have expressed concern that Mr Grenon would assert undue editorial influence after being linked to the right of centre online publication The Centrist, that has criticised the country’s mainstream press.

Similar concerns about editorial interference have been recently aired in the US following dramatic editorial changes made by Amazon founder Jeff Bezos to The Washington Post.

But Mr Grenon’s supporters have criticised the New Zealand Herald for lacking balance over the handling of the country’s Covid-19 response, race-relation matters and climate change in an era when it received government funding under the Ardern government.

Mr Grenon said the Herald would not have the same mandate as The Centrist.

The new board intended to improve on the newspaper’s journalism, with an emphasis on factual accuracy, less selling of the writers’ opinions and broadening its appeal to a wider political spectrum, he said.

In a letter sent to the NZME board, Mr Grenon criticised its handling of costs. “At the top end, the chief executive compensation is much too high relative to the size and complexity of the business, averaging over $NZ2.25m per year for the past three years,” he said.

Mr Grenon also hit out at comments in the company’s results presentation over its editorial commitment to “set a new tone and build positive social momentum for New Zealanders”.

“My intention is that more quality content should be produced, not less. This is needed to attract new subscribers,” he said.

He quoted a report from the Auckland University of Technology research centre for Journalism, Media and Democracy, claiming public trust in the Herald had declined by over 25 per cent since 2020, and demonstrated a trend where individual financial support for the newspaper had declined.

“In contrast … our proposal will result in the production of quality content, with an emphasis on news, on a cost-effective basis,” Mr Grenon said. “Then it will be used in any number of ways to generate profit.

“It may be that some of what NZME produces becomes ‘clickbait’, but it still needs to be reliable, informative, interesting and trustworthy. That is the Herald’s heritage and strength.”

NZME chairman Barbara Chapman said NZME had out performed Australasian media peers over the last five years in both share price performance and total shareholder returns.

Cost management remained a focus, with a target $4m in cost savings announced at the 2024 financial year and further efficiencies planned.

“An improved operating environment, cost reductions, operational improvements and the OneRoof strategy are set to drive additional shareholder value in the 2025 financial year,” she said.

With regard to Mr Grenon’s proposal, she said the board was assessing several areas of concern, including NZME’s governance, independence, nominee suitability and editorial integrity, and was receiving independent advice.

“ A broad group of our shareholders and stakeholders are also raising these concerns. The implication for all shareholders needs to be carefully considered and those with a vested interest should be asking questions, as we are,” she said.