Sky TV to buy Three owner Discovery NZ
Sky TV has agreed to fully acquire TV3 owner Discovery New Zealand for $1.
Discovery NZ is a part of United States media giant Warner Bros. Discovery.
NZX-listed Sky said the deal would be completed on a cash-free, debt-free basis, with completion expected on August 1.
Sky expected the deal to deliver revenue diversification and uplift of about $95 million per year.
It expected Discovery NZ's operations to deliver sustainable underlying earnings growth of at least $10m from the 2028 financial year.
Sky chief executive Sophie Moloney said it was a compelling opportunity for the company, with net integration costs of about $6.5m.
"[It] directly supports our ambition to be Aotearoa New Zealand's most engaging and essential media company."
Sky said it gave the Commerce Commission confidential advance notice of the transaction and the watchdog did not intend to consider the acquisition further.
Warner Bros. Discovery Australia and NZ managing director Michael Brooks said it was a "fantastic outcome" for both companies.
"The continued challenges faced by the New Zealand media industry are well documented, and over the past 12 months, the Discovery NZ team has worked to deliver a new, more sustainable business model following a significant restructure in 2024.
"While this business is not commercially viable as a standalone asset in WBD's New Zealand portfolio, we see the value Three and ThreeNow can bring to Sky's existing offering of complementary assets."
Sky said on completion, Discovery NZ's balance sheet would be clear of some long-term obligations, including property leases and content commitments, and would include assets such as the on demand ThreeNow platform.
Sky said irrespective of the transaction, the company was confident of achieving its 30 cents per share dividend target for 2026.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NZ Herald
an hour ago
- NZ Herald
Media Insider: TVNZ set to scoop World Cup rights in major new pay TV move; MetService trials app charges for ad-free weather forecasts
State-owned TVNZ has maintained it will always be an ad-funded, free-to-air network first and foremost. But having the capability to bid for sports rights - and charge audiences - is a critical new component in its business model and strategic intentions. In a week when TVNZ has learned its two biggest local competitors are becoming one - with Sky buying Three (TV3) for $1 - TVNZ is expected to use the World Cup to showcase its credentials as a reinvigorated sports broadcaster. TVNZ said last night it was not in a position to comment but several well-placed sources believe the state broadcaster has won the rights following a highly competitive battle with Sky. The men's football World Cup is the biggest sporting event on the planet - even ahead of the Olympics - with billions tuning in every four years. According to Fifa, the 2022 World Cup in Qatar drew five billion fans across all media - the total reach of the France-Argentina final alone was a record 1.42 billion viewers. Argentina celebrates winning the World Cup, after beating France in the final in Qatar in 2022. Photo / AFP Sky held the World Cup rights in 2022, with some free-to-air coverage on Prime and Stuff. Next year's tournament, in the US, Canada and Mexico, features an expanded competition with 48 teams, including - for the third time in the tournament's history - the All Whites. Anyone who thought that Sky's fire-sale purchase of TV3 this week would create a broadcasting monster capable of blowing TVNZ and other rivals out of the water - especially when it comes to sporting and entertainment rights - has not factored in the digital investment which allows media firms to expand their own business models. TVNZ is investing up to $100 million over the next five years as it transforms into a digital-first business, with massive new revenue and audience targets. The new technology means TVNZ would be able to package up a major sporting event, offering - for example - a certain number of games for free, with others requiring a subscription. In the case of the World Cup, it might consider offering some or all of the All Whites matches live and free - along with the final and some other major games - but broadcasting the bulk of the tournament behind a paywall. As Sky becomes a more rounded broadcaster with access to well-established linear channels and - in ThreeNow - a broadcast video on demand (BVOD) platform, so too is TVNZ now encroaching into Sky's subscription TV space. Apart from several years when the ultimately doomed Spark Sport was operating, Sky has enjoyed a virtual monopoly on major New Zealand sports rights for more than three decades. And while TVNZ appears to have the rights for the World Cup - with possibly the Olympics to follow - it may well want to target season-round major codes in the longer term. It has benefitted from having domestic cricket rights after Spark Sport's sudden closure, but Sky has won back those rights after next summer. Special events certainly give broadcasters a short-term boost, but greater value is likely to be in long-term rights to the likes of rugby, league and cricket - full seasons keep subscribers engaged for months, and paying good money to follow their teams each week. Sky right now is on the cusp of securing rights for All Blacks and other top-level rugby such as Super Rugby, although NZR and Sky are still haggling over price. At the moment, the new rugby deal is for another five years, with Three (TV3) now looking more probable as the free-to-air platform, following Sky's announcement this week that it was buying the channel from Warner Bros Discovery. Olympics rights TVNZ chief executive Jodi O'Donnell. TVNZ is also believed to be a frontrunner to secure rights to the Olympics in 2027 - it's in a battle with Sky for those rights, too. In June, TVNZ chief executive Jodi O'Donnell indicated that the state broadcaster was bidding for the rights to the Los Angeles Olympics in 2028 – New Zealand is one of the territories for which rights have yet to be confirmed. In Australia, Nine has the rights to the 2028 Games as well as the Brisbane Olympics in 2032, and it is possible the International Olympic Committee (IOC) could be packaging up the rights for both sets of Games for a New Zealand broadcaster. TVNZ last held the Olympics rights in 2008, for the Beijing Games. More than 2.6 million Kiwis watched the Games in their opening weekend that year. Since then, Sky has had the rights for the 2012 London Games, 2016 Rio Games, 2020 Tokyo Games (TVNZ had secondary free-to-air rights) and 2024 Paris Games. Sky TV's 12 channels of coverage for the Olympic Games in London in 2012. Sky said last year that a total of 2.82 million people – 57% of New Zealand's population – watched the Paris Olympic Games. 'If you look at something like the Olympic Games, for example, the ability for that to be brought to New Zealanders so they can watch it free but the ability for us to compete for those rights means that we need to find some different revenue options as well,' O'Donnell said, of TVNZ's pending new technology. 'That might be an option that you'd think about – an Olympics Pass, for example.' Asked directly if TVNZ was bidding for the Olympics, O'Donnell said: 'There's quite a few sports rights in the market at the moment. We haven't been shy about our ambitions around that. We put our best foot forward. 'I don't have anything to share with lots of sporting rights available in the market at the moment.' Sky chief executive Sophie Moloney and Warner Bros. Discovery Australia and New Zealand managing director Michael Brooks at this week's press conference, following the announcement that Sky was buying Three for $1. Photo / Cameron Pitney Sky confirmed in June it was also vying for the Olympics rights. 'All our content partnerships need to make financial sense for Sky, both in their own right and as part of the overall mix of sport that we bring to our customers, and we are having constructive discussions on that basis,' said a spokeswoman at the time. 'We think it's healthy to have choice in the local media ecosystem, particularly as sports codes need broadcast partners from grassroots right through to high-performance competitions. 'Most of the headline-making sport in New Zealand and a high-performing range of entertainment content is on Sky.' MetService also enters subscription market Another state-owned commercial business, the MetService, has started charging audiences for weather forecasts as part of a new trial. The MetService has given customers the option of a $1.99 monthly fee or a $22.99 annual fee should they want an advertising-free experience on the app. The trial has raised eyebrows in some quarters, and on social media, about how a publicly owned weather forecaster could be charging the public for weather forecasts. The MetService is set up as a state-owned enterprise and commercial business. 'We launched the ad-free version of the MetService Weather app in early July as an outcome of customer feedback requesting the option to remove ads,' said a spokeswoman. 'The opportunity to sign up will be available for about one month or until we have the maximum number of participants for the trial, whichever comes first. 'For those who subscribe during the trial period, we've committed to keep the ad-free version of the app available for a minimum of one year. 'Input from subscribers will help us understand if there is enough interest to support an ongoing ad-free or premium service. The trial is ongoing, and we will be reviewing the results once it concludes.' She said the MetService was a state-owned enterprise that operated like a commercial business, returning profits to the Government. 'While key warnings and some forecasts are funded by the Ministry of Transport, most of what you see on our website and apps is paid for through advertising revenue which allows us to offer more forecast locations, data and features. 'We aim to keep ads balanced and user-friendly; however, we know they can sometimes get in the way, that's why we are exploring the viability of an ad-free option.' Stuff print site for sale Stuff's 35-year-old newspaper printing plant in Wellington faces an uncertain future with news that the owner of the site is selling up. Bayleys is advertising the land and buildings at 35 Bouverie St, Petone - the publishing company leases the site from Stuff's former owner, Australian media firm Nine Entertainment. The plant prints The Post and a range of Stuff's other North Island-based newspapers. Stuff also has a print plant in Christchurch. Stuff leases the printing site in Petone from Nine Entertainment. Photo / Bayleys 'Home to the same use for over 30 years, time is almost up for the current tenant, so now is the time to review this site's future alternate uses,' says the Bayleys advertisement. It says current lease arrangements expire no later than May 31, 2028, 'but with a right for the owner to require vacant possession in May/June 2027″. The site is owned by former Stuff owner Nine Entertainment, under the company name Mi9 NZ. 'Sites of this size in such a prime location are few and far between,' says the Bayleys ad. 'This one provides a great opportunity for developers, owner occupiers, and investors alike and gives you time to formulate plans for the property's future and receive a healthy return in the interim.' None of that sounds too promising for any future printing ambitions at the location. Stuff Masthead Publishing managing director Joanna Norris. Photo / RNZ However, Stuff masthead publishing managing director Joanna Norris said last night that the company had been prepared for the sale. 'We (Stuff Ltd) have a current lease for the land and buildings which house our Petone print plant. 'This runs to mid-2027, with a right of renewal option. The site remained in the ownership of Nine Entertainment Co. when Stuff owner and publisher Sinead Boucher bought Stuff back into New Zealand ownership in 2020. 'Nine has now given us notice that it will look to sell the land and began marketing last week. It is a great site, with an excellent tenant. 'Stuff Ltd has known and prepared for this eventuality. If the site is sold, we will work with our new landlord and most likely see out our current lease and renewal with further options in scope. 'This has no impact on our operation or publications.' Staff Masthead Publishing is the division responsible for all of the company's newspapers and digital subscription services, such as The Post and The Press paywalled websites. Earlier this year, it was revealed NZME had been in discussions to buy those assets, but talks were halted as NZME's board changes unfolded. Boucher has said she has no intention to return to the negotiation table, but after this week's seismic changes in the New Zealand media landscape - with Sky buying Three - it would not be a surprise if the parties do start talking again. The full Media Insider column returns next week. Editor-at-Large Shayne Currie is one of New Zealand's most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME. Watch Media Insider - The Podcast on YouTube, or listen to it on iHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts.
RNZ News
17 hours ago
- RNZ News
Farmers 'going hell for leather' to take advantage of high prices
Rosalind Crickett said it looked like dairy farmers were "going hell for leather" as they took advantage of high milk prices. Photo: 123rf Some milk processing factories are bursting at the seams as huge volumes of milk are trucked to their plants, according to a dairy analyst at NZX. Rosalind Crickett says there was a record collection of milk solids last month - nearly 18 percent more than the same time last year. It was also nearly 12.5 percent higher than the last five years' average. Crickett said it looked like dairy farmers were also "going hell for leather" as they took advantage of high milk prices. Crickett described June's national milk collections as "off to a flying start" with 23,956,000kg of milk solids collected - a record for the month and surpassing expectations. While off a low base, the figure marked a 17.8 percent year-on-year (YoY) leap on June 2024, and a 14.8 percent improvement on the previous record (June 2022). There were 261,000 tonnes of milk collected in June, also a record, with the figure up 14.6 percent YoY and up 9.9 percent on the rolling average of 238,000 tonnes. This month's milk supply was also expected to be up by 10 percent, partly due to lush pasture growth particularly in the South Island, where not as many farmers dry off at this time of the year compared to further north. Butter - getting expensive. Photo: Margaret Jaszowska for Unsplash But would so much milk arriving at processing plants lead to a drop in the price of locally sold butter for consumers ? Crickett said that would depend on how much milk was able to be processed in other countries next month and sold in international auctions at the same time as New Zealand. "If there is not as much in the northern hemisphere, it's because we are seeing drought across Europe impacting their grain production for cattle feed. And we are seeing water supply issues as well. "That will be a price support for New Zealand products because they are going to need to export more to make up for that deficit globally." She said grass conditions seemed to be set up well for the spring flush with an overwhelming abundance of moisture in the ground, but avoiding pugging damage may become a headache for farmers before then. However, the large quantity of milk produced was expected to continue, and Cricket said it would be interesting to see what transpired. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
19 hours ago
- RNZ News
Head of NZ stock exchange Mark Peterson resigns
Head of the NZ Stock Exchange Mark Peterson said the time was right to stand down. Photo: RNZ / Dom Thomas The head of the NZ Stock Exchange (NZX), Mark Peterson, has resigned and will leave in April next year after close to a decade in the position. He said he was close to achieving certain projects aimed at developing and bringing growth for the company, and it was an appropriate time to be going. "The company is in a strong position financially - including NZX Wealth Technologies now being cashflow positive from external client activity. "NZX has an experienced and talented senior management team, is operating up-to-date and secure technology infrastructure and has a positive organisational culture and relationships with customers, stakeholders and shareholders. "This demonstrates the time is right for me to stand down and for the NZX board to appoint a new chief executive to lead NZX into the future and continue to deliver its strategic priorities." Peterson said giving such advance warning would allow a smooth transition and give plenty of time to search for a new chief executive. He joined NZX in 2015 as the head of its markets operations, was appointed acting chief executive in January 2017 and confirmed in that position in April 2017. His term was extended in August 2023. NZX chairperson John McMahon said Peterson had been an exceptional leader of NZX. "He is a highly effective all-round performer who has calmly and ably led the NZX Group through some challenging and volatile times. "Mark has also built strong relationships in New Zealand and internationally, in particular the business partnerships we have with the Singapore Stock Exchange and the European Energy Exchange." Peterson counted the launch of NZX's anonymous mid-point trading venue, NZX Dark, its equity futures products, and the expansion of its wealth management business, Smart, as key achievements. He said he believed he still had another executive role in him but did not have any firm plans other than taking a break. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
