Simon Barnett and Lana Cochrane-Searle host MediaWorks' More FM breakfast show.
Some of our most popular radio stations may soon be up for sale, with plans to break MediaWorks’ New Zealand operation into separate firms.
Outdoor advertising and radio media firm MediaWorks will split into two, with its outdoor business to be rebranded QMS, reporting directly to its Australian overlord.
That will leave MediaWorks’ radio brands - including The Breeze, The Edge, More FM, The Sound, Mai FM and The Rock, as well as digital audio platform Rova - as a standalone operation, and ripe for a potential sale.
MediaWorks - now 100% owned by Australian outdoor advertising firm QMS - secured in July the highly prized Auckland Transport outdoor advertising contracts, thought to be valued at $350 million over the next 10 years.
As Media Insider reported at the time, that massive tender win - in place from October 16 - would lead to inevitable speculation about whether MediaWorks retained its radio arm, or spun it off to focus on its outdoor advertising business.
Today, MediaWorks confirmed it was splitting into two.
From October 1, its outdoor advertising business would transition to the QMS brand and report to QMS Australia in a “strategic alignment”.
“This important step change ... follows MediaWorks’ success in winning the recent Auckland Transport street furniture contract and brings together the scale, capability, and deep operational experience of QMS - proven through its successful management of the world-leading City of Sydney street furniture concession - to drive even greater outcomes for Auckland Transport and the wider OOH business in New Zealand,” said a MediaWorks statement.
QMS Australian executive Adam Trevena - who played a pivotal role in securing the AT contracts - has been appointed to the role of QMS NZ director. The company said he would be “responsible for the successful delivery of the Auckland Transport concession as well as the continued expansion of our overall OOH portfolio”.
MediaWorks staff have been briefed this morning on the proposal. It is understood there are no job losses planned, but sales staff will be separated into one of the two companies.
Direct sales staff will remain with the radio arm, while the agency sales team is likely to be split into two, between radio and outdoor.
MediaWorks chief executive Wendy Palmer - one of New Zealand’s most respected media and radio executives - would continue to lead the radio firm.
“Aligning our OOH division with QMS makes strong strategic sense,” said Palmer in a statement.
“With QMS’ scale and proven capability, we know our OOH portfolio will go from strength to strength. At the same time, radio is in an incredibly strong position.
“We’ve just achieved our largest-ever survey share, revenue is growing every quarter, and we are continuing to invest in local markets and our digital platform, Rova.”
She called the splitting of the company an “exciting next step forward”.
However, the move will also renew speculation that the radio arm will now be on the block. Does QMS really want its attention on the growing outdoor advertising sector diverted in any way?
Locally, there is unlikely to be a lengthy list of potential buyers.
MediaWorks’ biggest radio competitor, NZME - owner of Newstalk ZB, a suite of music stations and the NZ Herald - might be keen on certain high-performing stations, but it might also find the Commerce Commission has a view on that.
Some of Australia’s biggest radio firms, including ARN Media, Southern Cross Austereo and Nova Entertainment, could be among potential buyers.
In May, MediaWorks announced an after-tax loss of $16.2 million for 2024 but highlighted growth in revenue and Ebitda.
The result, for the 12 months to December 31, 2024, was a considerable improvement on its 2023 result, when it recorded a $107.4m loss, although that number also contained an $86.5m impairment.
The company announced revenue of $213m (including total advertising revenue of $202m) for its full financial year to December 31, 2024 – up 4% on FY23 – and Ebitda (earnings before interest, tax, depreciation and amortisation) of $38.9m, an increase of $4.4m (13%) year-on-year.
Radio and digital advertising contributed $150.5 million and outdoor advertising contributed $51.5m to the total advertising revenue of $202m.
That outdoor revenue number is set to be supercharged - MediaWorks said in July that its AT tender win was a “game-changer”.
The four contracts are to look after advertising on street furniture (including 970 shelters), vehicles (such as buses and trains), transport hubs and stations, and billboards.
MediaWorks and QMS chairman Barclay Nettlefold said today the separation of the New Zealand business was positive. He talked up radio’s performance.
“Radio is standing tall, delivering consistent results and growth, while our OOH operation gains the backing of one of the most experienced and capable outdoor businesses in Australasia.
“Together, this positions both sides of the business for long-term success. The changes ensure that radio continues to stand proudly on its own two feet, while OOH benefits from the strength and scale of QMS.”
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.