MediaWorks denies TV sale to US firm for $40m, Radio listing on NZX

MediaWorks owns the TV station Three. Photo / File

MediaWorks is denying industry talk that its TV arm has been sold to a US firm for between $30 million and $40 million, while its radio arm will be listed on the NZX.

"That information is absolutely incorrect," a spokeswoman for the broadcaster said.

Late last month, MediaWorks denied talk that its chief executive Michael Anderson was on the brink of leaving. Anderson announced his resignation barely a week later, on July 8.

But the broadcaster gave itself wiggle-room for its denial, saying while Anderson had announced he was quitting, he would not actually be leaving for months.

In a July 8 interview with the Herald, Anderson confirmed negotiations for the sale of MediaWorks' TV arm were down to one buyer.

However, he would not confirm if that buyer was US broadcaster Discovery Inc.

"Things are also looking positive for the sale of TV and we hope to make an announcement in the coming weeks," Anderson said.

Discovery has previously invested in this part of the world. In 2016, it tipped millions into Auckland-based RugbyPass, which in turn sold to Sky TV in a US$40m deal last August.

If a sale of the loss-making TV division does go ahead, it would smooth the way for the profitable radio arm to list on the stock exchange. But at this point, MediaWorks denies there is any such plan.

On June 12, the company reported it had slumped to a $25.14 million loss and says material uncertainties impacting earnings might cast "significant doubt" on the group's ability to continue as a going concern.

Financial statements for the year to December 2019 report the company's total liabilities more than doubled during the year to $296.34m ($138m in 2018) with borrowings of $133.1m at balance date.

The loss was largely attributable to an impairment of $21m, including a $12.13m write-down on property, plant and equipment assets.

MediaWorks' assets include TV station Three and radio brands The Edge and The Rock.

Covid-19 has severely impacted the business.

MediaWorks had obtained $8.6m of wage subsidies and had asked all existing employees to take a voluntary 15 per cent pay cut.

Full salaries were reinstated at the beginning of July.

The company also announced last month that 130 staff were being made redundant in its radio and sales teams.

"Covid-19 has simultaneously changed the world and impacted our business in ways that we could not predict or prepare for," Anderson said previously.