Who owns Newshub: TV3′s troubled ownership tale

The fate of the troubled media asset best known as Three or TV3 has been tumultuous for years, with public sales tossing it between private equity and global media ownership.

Newshub is set to close at the end of June. Follow our live coverage here.

Warner Bros. Discovery, the owner of the free-to-air business that includes Newshub and the AM programmes, revealed on Wednesday a proposal to shut down its newsroom by the end of June.

If followed through, what would be left of the business would be largely a streaming offering focused on ThreeNow, with free-to-air linear channels filled with some local programmes and Warner Bros.’ international content.

“Free-to-air and news are expensive businesses to run,” Warner Bros. Discovery’s head of networks in New Zealand Glen Kyne wrote in the public proposal announcement.

“Put simply, the economic headwinds means the returns are not there.”

Discovery NZ, the official business name for TV3, made a $34.8 million loss in the 2022 financial year from $159m of revenue.

Staff costs totalled $59.7m that year and programming and production cost another $9.3m, nearly tripling on the year before.

The newsroom has been a battleground for all of TV3′s previous owners.

While Newshub was held up as its mainstay offering in a limited current affairs television market, the business was ultimately loss-making and costly to keep up.

Discovery took over the ownership of TV3 in December 2020 and rebranded it to Warner Bros. Discovery in April 2022 as a result of a US media merger. Photo / Dean Purcell

Discovery’s doomsday

The Asia Pacific arm of United States public media company Warner Bros. Discovery, called Discovery Networks Asia-Pacific, purchased MediaWorks TV on December 1, 2020.

While a price was not disclosed, it reportedly paid $20m.

It ended a year-long process by MediaWorks to sell the television asset.

Hailed at the time as the saving of TV3 internally, changing its official name to Discovery NZ, it was only ever a short-term lifeline.

The acquisition contract said Discovery would financially assist the television business for a minimum of 12 months.

“It was in the process implementing a strategy of consolidating its New Zealand operations and leveraging its global network to deliver synergies to improve operating earnings,” TV3′s most recent financial statements read.

In April 2021, Discovery took an axe to the company’s costs, with a restructure removing some staff from the newsroom, promotion, sales and marketing departments.

It followed a voluntary cut to staff wages during the pandemic.

Former Mediaworks chief executive Michael Anderson was brought to tears when he announced to staff the successful sale of TV3 to Discovery in 2020. He had already resigned from the business at the time.

One year later in April 2022, Discovery New Zealand was folded into Warner Bros. Discovery, a result of the global merger between United States media giants WarnerMedia and Discovery.

The amalgamated entity has brands HBO, CNN, Cartoon Network, Animal Planet, Warner Bros, Food Network, TLC and New Line Cinema, among many others.

It made a net loss of US$400m ($648m) in the last quarter of 2023 and has been paying down billions in debt - it’s still riddled with it, with US$44.2b on its books.

MediaWorks era

Before that, TV3 was once part of the mixed media company MediaWorks, which had a billboard business and radio stations The Edge, More FM, George FM, Mai FM, The Breeze and The Rock, among others.

MediaWorks carved off TV3 and put it up for sale in October 2019.

It was feared a failure to sell it would result in the business closing down for good.

TV3 was once part of the mixed media company MediaWorks, which had a billboard business and radio stations including The Rock, The Edge and George FM, which had hosts including Thane Kirby, pictured.

At that time MediaWorks was owned by private equity firm Oaktree Capital - a distressed debt purchaser co-founded by investing icon Howard Marks with US$189b ($306b) in assets under management.

MediaWorks merged with the outdoor advertising business QMS in December 2018.

That resulted in QMS owning a 40 per cent stake of MediaWorks and two seats on the board, with Oaktree owning the majority 60 per cent and holding three seats.

It was during that era of MediaWorks that it was run by Michael Anderson - the Australian executive who was brought to tears when he announced the successful sale of TV3 to Discovery.

It occurred just as he was exiting the business. He resigned in July 2020.

Debt buyouts

Oaktree took over the ownership of MediaWorks, then TV3 and radio, from another private equity giant, TPG and Bain Capital, in 2015.

Before that, it was already buying up MediaWork’s debt, which it ultimately converted to equity.

Previous owners of MediaWork’s debt included TPG and Australian private equity firm Ironbridge Capital, which initially purchased the media company’s debt from the Commonwealth Bank of Australia.

Other previous owners of MediaWorks included the Royal Bank of Scotland, Westpac New Zealand and Rabobank.

A still from the very first TV3 broadcast in 1989. Photo / TV3, NZOnScreen

TV3 launched in 1989 as the country’s first privately-owned nationwide free-to-air channel.

It first went to air on November 26 that year.

Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment and has covered business and economics for television and radio broadcasters. She previously worked for Newshub Live at 6pm.