Newshub bosses floated a bold plan - one that might have helped save the news organisation and trimmed costs for everyone - at a secret meeting with the chief executives of TVNZ and RNZ just over a week ago.
But TVNZ rejected the idea after an extraordinary board meeting the following day - a decision that Warner Bros Discovery boss Glen Kyne has described today as “baffling” and “disappointing” in light of the state broadcaster’s own big financial losses announced this morning.
TVNZ, in turn, says that Warner Bros Discovery’s plan would have added cost and risk and to position the state broadcaster as being responsible for any Newshub decisions is “incorrect”.
Media Insider can reveal Kyne met with TVNZ chief executive Jodi O’Donnell, chairman Alastair Carruthers and RNZ chief executive Paul Thompson on February 21 to discuss the plan for a joint newsgathering service between the three organisations.
But despite its own financial issues, TVNZ’s board rejected the idea at an extraordinary general meeting the following day.
A week later - on Wednesday this week - Warner Bros Discovery announced it planned to close Newshub by June 30, citing costs and a massive advertising revenue drop.
The proposed news agency would have supplied stories, including video packages, to all three organisations - helping them reduce people costs. The agency would essentially have operated like the old NZPA newspaper model - a central hub providing coverage of “commodity” style news.
In other words, rather than the three organisations sending three separate teams to cover the same story or an event, one team would do it for all three companies and their platforms.
That would allow them to reduce costs in their own newsrooms, while retaining as many of their own staff as they wanted to investigate and break original stories.
Kyne today confirmed the meeting, following Media Insider inquiries.
He said TVNZ’s financial results today - the state broadcaster posted a six-month loss of $16.7 million - made their decision not to even have a second discussion “baffling”.
“I outlined to everyone in the room what I saw as the problems that the whole sector is facing,” said Kyne in a statement.
“We didn’t tell them anything about our proposed consultation process, but what we did do was outline the imminent issues facing all news media across the country.
“There was agreement from everyone in the room about those problems and it appeared we were aligned on the industry headwinds and challenging financial circumstances.”
He confirmed the agency would act like the former NZPA - “a shared news gathering service formed out of the TVNZ and Newshub newsrooms, supported by RNZ, that would then create and license content back under agreed independent editorial guidelines”.
“It was very much an opening conversation that we thought would give way to more talks where we expected there would be a willingness and desire to find collaborative industry solutions, and figure out in more detail, together, on what the new operation could look like; and we would only want to do this in collaboration with TVNZ.
“When we left the meeting I felt like it had been well received but didn’t have an expectation either way. We wanted to explore any opportunity that may have given rise to a potential different outcome for the Newshub team.
“Two days later, TVNZ chair Alastair Carruthers communicated to us that he had called an Extraordinary Board Meeting the very next day, the board discussed the idea, but would be passing on it without any further discussion.”
In a statement today, a TVNZ spokeswoman said: “TVNZ’s CEO and Chair meet with other media leaders as is appropriate. We had an initial discussion with Warner Bros Discovery and RNZ (at Warner Bros Discovery’s request) just over a week ago on how we might work together in news. This discussion was preliminary, but would have seen TVNZ take on significant cost and risk of a new service, so we informed Warner Bros Discovery that were not in a position to advance any talks.
“We were not told of Warner Bros Discovery’s plans to disestablish Newshub. We understand these plans have been in place for some time from media reports this week.
“Our results today show we need focus on ensuring the sustainability of our own organisation. To position Warner Bros Discovery’s decisions as the responsibility of TVNZ is incorrect.”
In his own statement, Kyne said he was clearly disappointed.
“Seeing today’s news of TVNZ’s large financial loss, that disappointment has only grown as I genuinely believe solutions to the outlook for the sector should be solved in collaboration with other media companies. There were no details to what I had proposed. These would have been discussed at the second and following meetings which we never even got to.
“When I rang Minister [Melissa] Lee the night before the announcement of our proposed restructure, I advised her of this meeting and my disappointment at not only TVNZ’s decision, but the swiftness with which they rejected exploring the idea any further.”
TVNZ and Lee have been approached for comment.
Today, TVNZ announced its own financial losses - a $16.7m half-year, after-tax loss. This included a $12m impairment, which took the half-year loss well outside the full-year forecast of $15.6m.
The decision to reject the news service idea is intriguing in light of TVNZ’s financial troubles and the need to cut costs.
O’Donnell, in releasing the half-year results this morning, said that TVNZ expected challenging economic conditions to continue into the second half of 2024.
“We will need to make further changes to our cost base to navigate through this uncertainty,” she said.
“While we hope to see some improvement in the advertising sector in late 2024, we anticipate market disruption from global streaming services and social media platforms to continue, and this means standing still is not an option. Ultimately, we need to get our organisation into the right shape and the right size to compete in a digital world.”
Kyne revealed to Media Insider on Wednesday that the proposal to close Newshub came in late January after he returned from summer leave and after he received a call from Warner Bros Discovery APAC president James Gibbons.
“He informed me that this was an option that the company wanted us to consider. There was an evaluation process undertaken for a couple of weeks. That was circulated around global senior leadership at Warner Bros Discovery and approximately two and a half weeks ago, that was moved from an evaluation phase to a consultation and proposal phase,” he said.
“We have spent the last couple of weeks preparing for that at great speed, the culmination of which has been today.”
The company has yet to release its 2023 financial results but Kyne confirmed its position - it lost $35 million in 2022 and $21m in 2021 - had not improved.
He would not outline the specific cost of the newsroom operation - but it runs into the millions.
Asked on Wednesday if he had sought any support from other media or potential partners to try to save Newshub or any of its talent and programming in the last four weeks, he referred to possible future discussions.
“What was also important today was to be able to help avail ourselves of those other conversations and opportunities that might be in the market. And so I fully expect to have a lot of feedback and conversations, not just from our people, but from external third parties over the coming days and weeks.”
A buyout - such as one that saw Sinead Boucher buy Stuff for $1 from Nine in Australia almost four years ago - is an option, but it seems highly unlikely given the company is running at a massive loss.
Kyne said on Wednesday he did not want to put out any “false hope” to his people.
“We have to be clear with them about the facts of the market and why we’ve made the decision we have made - that we can’t find a way on our own to be viable. But of course, if there’s an opportunity for a discussion, my phone is on, I’m all ears and we will have every single one of those conversations. That’s my commitment to our people.”
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