Government pays out final $4m of $50m media company bailout. Where did the money go?

Broadcasting and Media Minister Kris Faafoi. Photo / File

The Government this week paid out the final $4 million as part of its $50m bailout to media companies affected by Covid-19.

This will see more than 300 New Zealand magazines and community newspapers get a cash payout of just over $12,000 this month.

A total of 209 magazines and 151 community papers initially applied for the support package before the October deadline. Of these, only 29 were rejected for not meeting the requirements of showing they had independent journalistic content, suffered a 30 per cent decline in revenue and were New Zealand-based.

The focus of the grant on individual publications means that publishers with a portfolio of titles were able to access the package for each of their affected titles.

"The Publications Grants were targeted at media organisations that have yet to receive significant relief from the $50m media sector support package," Broadcasting and Media Minister Kris Faafoi told the Herald.

"Many magazines and community newspapers suffered a decline in advertising revenue – in particular through the Covid-19 alert 4 period."

The list of publications spans a comprehensive rundown of niche, trade and community-based publications. Mindfood, M2 Magazine, the Indian Weekender, Dish, Kiwi Gardener and NZ Life & Leisure were just some of the titles included in the mix.

Magazine Publishers Association chairman Nicholas Burrowes said the grants were a boost at the end of a tough year.

"It will be welcome relief for some of our publishers struggling with the after-effects of a lockdown publishing ban and reduced advertising revenues."

Magazines and community papers were among the worst-affected by the lockdown in the media sector.

Despite extensive pushback from the industry, these publications were not deemed essential services and were forced to pause production throughout the lockdown period.

On top of this, the magazine industry has been one of the worst-affected by the collapse of the advertising market in 2020.

These issues persisted long after the lockdown ended. Data from researcher SMI shows that while the overall advertising market was still down 11 per cent on last year in early October, the magazine industry remained 56.2 per cent off the pace of last year. The only sector to see a bigger decline was cinema, which sits at 66.8 per cent behind 2019 levels.

The protracted efforts to sell Bauer's previous portfolio of magazines would have contributed to the low advertising levels, but it's unclear whether a magazine industry in the process of an extensive rebuild will be able to lift its share of the advertising market to levels seen in previous years.

The magazine industry pleaded for support from the Government earlier this year, even pleading with Minister Faafoi and former Associate Minister of State-Owned Enterprises Shane Jones to step in and foot the bill for NZ Post's postage rate hikes in July. Nothing ever came of those efforts and the industry was left waiting to see what support the Government would include as part of its $50m media bailout package.

The final allocation of government money now shows that $19.82m was put toward a transmission fee waiver for broadcast media, $16.5m went toward waiving media company contributions to NZ On Air, $4.83m in advance purchase of government advertising, $4.25m toward the publications grant and $1.55m in advance purchase of government entity news subscriptions.

The final total came in below $50m, in part because of the Government's advance spending on advertising falling below the $9m figure included in earlier budgets.

The allocation of media funding was managed by Manatū Taonga, the Ministry for Culture and Heritage, which says they will be looking a little further down the line at challenges facing the industry.

"After providing near-term relief to help stabilise the media sector, further work will focus on policy and legislative changes that address the core, longer-term challenges facing media," said a spokesperson.

The Government was initially expected to launch a second tranche of funding for the media industry but this has not materialised.

In late August, RNZ reported that these plans had been scrapped because the coalition partners that made up the previous Government failed to reach a consensus. Faafoi admitted that his proposals never even reached Cabinet.

Asked if he was revisiting these proposals now that there was no longer a reliance on coalition partners, Faafoi indicated there weren't plans for a set tranche of funding and that the Government would instead be working on a longer-term approach.

"That will involve multi-year contestable funding through NZ On Air to fund public-interest journalism, and to protect jobs that would otherwise be at risk or lost due to the impact of Covid-19 on newsrooms," Faafoi said.

"It's my aim to see this work implemented in this term of government."