Anyone got Warren Buffett's number? APN New Zealand Media has announced it has made a strategic decision to put three regional publishing businesses—The Star in Canterbury, the Oamaru Mail and the Capital Community Newspaper group in Wellington—on the market.
“While the company has enjoyed a long association with the South Island, we see more expansion opportunities in the North Island, which will drive most of New Zealand's population growth over the next decade and where we have most of our New Zealand media businesses,” chief executive Martin Simons said in a statement (see below for a few comments from Simons).
The statement says APN has decided to consolidate its publishing business in the North Island where it has a strong stable of daily, Sunday and community newspapers, magazines and websites, but APN "remains strongly committed to New Zealand and will continue to sell its national magazines and online properties across the country".
APN says it will continue a major association with Christchurch and the South Island through its 50 percent ownership of both The Radio Network and APN Outdoor and it also retains its strategic copy-sharing agreement with The Otago Daily Times through its APNZ news service, which was set up after the closure of NZPA and also includes a few other indies. And while it's still got the Ashburton Guardian on board, which, slightly surprisingly, recently implemented a paywall, this decision could leave a gap in its Canterbury coverage.
There were no announcements made about plans to put its North Island titles (The Northern Advocate, the Rotorua Post, Bay of Plenty Times, Wairarapa Times-Age, Wanganui Chronicle, Hawkes Bay Today or its flagship, The New Zealand Herald) up for sale.
The Star was founded 140 years ago and was a daily afternoon broadsheet before being converted to a bi-weekly free newspaper in the late 1980s. Current circulation is in excess of 70,000 and it is printed on Wednesdays and Fridays. The Star also publishes six free suburban titles comprising The Pegasus Post, Observer, News Advertiser, Western News, North Canterbury News and Selwyn Times. The newspaper won the prestigious PANPA (Pacific Area Newspapers Association) award for Best Community Newspaper in 2011 and, earlier this year, was named Community Newspaper of the Year in the NZ Canon Media Awards.
“We are proud of all our publishing teams, particularly the integral role The Star played in Christchurch after the second major Canterbury earthquake on 22 February 2011 when the newspaper was converted from a bi-weekly broadsheet to a daily compact within 24 hours to keep the community informed,” Simons says. “We very much hope that a new owner will build on this legacy and the great resilience of our people."
Simons said the Oamaru Mail also had long and proud history of serving readers and advertisers. It was first published more than 130 years ago and is currently a morning compact newspaper, published Monday to Friday.
The Wellington group of community newspapers, which are all produced from a central facility in Petone, comprised the Independent Herald, established in 1972, along with Cook Strait News, Porirua News and Wainuiomata News, all founded in the 1990s. The Capital Community Newspapers group also publishes the weekly free Kapiti News community newspaper, which circulates in the Paraparaumu to Otaki region north of Wellington, but APN intends to retain this title.
Simons says the company intends to sell all businesses as going concerns with staff transferring with the businesses into new ownership. It was too early to indicate when sales might occur, but he says staff were being kept fully informed.
But it could certainly do with some extra cash. APN shares have lost 63 percent of their value in the past 12 months, it announced recently that another 100 jobs were likely to be cut on top of "the 400 eliminated in the past three years" and, after what Australasian chief executive Brett Chenoweth called a tough first half of the year for the New Zealand publishing business, it wrote its Kiwi assets down by almost A$500 million, leaving the carrying value of intangible assets in New Zealand at $200 million.
UPDATE: Simons says this decision to sell some of its regional assets is separate to the high-level review conducted by Deutsche Bank earlier this year and is a strategic operational decision based on its publishing profile.
He doesn't want to downgrade the work of the staff or the publications that are going up for sale, but he says they are 'outpost' titles that don't fit into APN's strategy of using dailies and free papers in tandem.
As for The Kapiti News, he says APN is keeping that title because it is more in the Levin area, is tied to the regional publications and is close enough to Wanganui territory.
As for the coverage, particularly in Canterbury, he says it "will supplement that if we need to" and there's nothing stopping it from setting up a content deal with the new owners as part of the APNZ service. It already has its own independent people down there, he says.
As for who might buy the papers, he says the first job was to tell the people involved, so it hasn't done any canvassing of potential buyers yet, but he says interest has already been shown in the titles.
"I think community papers that are very close to their market and reflect what's going on at a local level have a long future ahead of them," he says. But, as a large company, he says APN doesn't get those benefits and it is investing more of its energy—and funds—in the north, on its flagship brands and online (it has just launched its regional websites like the Northern Advocate and Bay of Plenty Times in a new configuration).
He says some have said 'is this the beginning of the end?', but "it's nothing like that", he says, and while it's prudent to keep looking at the best options for the business, there are no plans to sell the North Island assets at this stage.