MediaWorks to sell TV business

MediaWorks has announced it intends to sell MediaWorks TV as well as its Flower Street property which includes its television head office and studios. It will retain ownership of radio and QMS.

According to the announcement, the sale of the Flower Street property will have a lease back option for a buyer to continue to operate TV from that location.

The sale comes days after the broadcaster confirmed cuts to its comedy offer, with 7 Days dropping in episodes and New Zealand Today with Guy Williams not returning.

It also comes after Ben Quinn was appointed as the director of content – TV in August, and Barry Sadlier was appointed chief financial officer in April.

The company’s FY 2018 results showed a net loss after tax of $5.5 million – an improvement on the previous year. Included in those results was TV revenue, which was up $133.7 million, after reaching $129.3 million in FY 2017.

About the sale, MediaWorks chairman Jack Matthews said that MediaWorks is committed to continuing to grow its business in New Zealand while recognising that free-to-air television operates in a challenging environment.

“The ongoing success of our radio business and recent merger with QMS demonstrates that MediaWorks has a very bright future. We are in the fortunate position of having two very strong growth platforms in radio and outdoor that deliver both revenue and margin growth. Our focus now is to accelerate the opportunities that exist for those platforms.

“We are in a commercial environment and have to face commercial realities. The market that free-to-air television operates in is tough and has been exacerbated this year. This is reflected in the performance of all free-to-air television operators in New Zealand, not just us. Clearly the market – alongside the structural hindrances we operate under – has a larger impact on Three given its genuine commercial imperative.”

MediaWorks CEO Michael Anderson added: “We are very pleased with the progress that Three has made over the past five years. This year we have had record ratings and revenue share highs and we are very proud of our stellar local content.

“The role Three plays in New Zealand society is significant, from Newshub through to investment in local comedy and drama. We believe MediaWorks TV is now in a place where it can be separated from the radio and outdoor business to be operated under a new owner in a more sustainable fashion – and, ultimately, for profit.”

MediaWorks has engaged an advisor “who will work with it to identify a list of potential purchasers and commence initial discussions”. From there, “any interested parties will head into a due diligence process which will be confidential”.

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