TV3 staff face a renewed period of uncertainty; NZR and Sky close to rugby rights deal; Shorty St eyes life support again; Cutbacks at creative advertising agency; Kiwi PR agencies win big on global stage.
The future of TV3 (Three) is once again in the spotlight, with parent company Warner Bros Discovery announcing a major shake-up of its global structure to try to improve its financial performance and shareholder value.
The international media giant is decoupling – splitting into two divisions, “streaming and studios” and “global networks”, the latter of which encompasses Warner Bros Discovery’s Three in New Zealand.
The move could be the precursor to another dramatic shift in the New Zealand media landscape, with one possibility that Warner Bros Discovery (WBD) could eventually let go of Three, especially if it does not see strong cashflow advantage.
While the list of genuine potential buyers of Three is a lot shorter than it once was, a broadcaster such as Sky TV might be near the top.
Despite improvements, Sky TV still hasn’t nailed its free-to-air offering and associated commercial potential – an increasingly important component in the ongoing battle for sports rights.
That becomes especially important for Sky as TVNZ will soon have the capability to offer improved ad-supported streaming television and subscription video on demand under its ongoing five-year digital makeover.
Warner Bros Discovery/Three has already endured turmoil in the past 18 months, with the loss of Newshub and almost 300 jobs across the newsroom, commercial, marketing and other teams.
Some 130 people are still employed by the company.
The broadcaster hosts a full slate of shows on channels including Three, Bravo and Eden, and streaming service ThreeNow, although TVNZ outperforms it in traditional ratings with only Three’s David Lomas Investigates a regular feature in the Nielsen top 10 rankings (ages 5+ and 25-54).
The state of Warner Bros Discovery’s New Zealand finances was laid bare last July – a massive $138 million loss in 2023, including a $79.5m impairment.
Its finances for 2024 should be released in the coming weeks.
The financial documents last July revealed Warner Bros Discovery’s US giant parent company had committed to a minimum 12 months’ further financial assistance – essentially until now.
As Media Insider reported at the time, the future of the company would then rest on whether its new strategic direction had been working.
Sources say Three has been performing above expectations in its pared-back state, despite the challenges facing every commercial media business.
In an auditor’s report attached to WBD New Zealand’s financial documents last July, PricewaterhouseCoopers said: “The ability of the company to support its ongoing operations for the foreseeable future is dependent on whether the company’s strategic transformation initiatives will be sufficient to mitigate the impacts of the decline in the advertising market and reduce reliance on the ultimate parent entity for financial support.
“There are also uncertainties relating to the ultimate parent entity’s willingness to continue to provide financial support beyond the 12 months from the date of signing these financial statements.
“If the strategic transformation initiatives do not sufficiently reduce the company’s need for such support, these events and conditions ... indicate that material uncertainties exist that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.”
A spokeswoman for Three said this week: “The free-to-air New Zealand networks were purchased by Discovery in 2020, prior to the merger with Warner Bros.
“Since then, a statement about support from the parent company has appeared in the financial statements every year.”
Warner Bros Discovery is essentially unravelling the merger three years ago of Warner Bros and Discovery to try to extract more shareholder value in two new companies.
The global giant announced that its new streaming and studios company would consist of Warner Bros Television, Warner Bros Motion Picture Group, DC Studios, HBO and HBO Max. Global studios would include CNN, TNT Sports, Discovery, free-to-air channels across Europe and digital products such as the Discovery+ streaming service.
The New Zealand operation was not mentioned in the press release, which – if you’re a WBD staff member – could be read positively or negatively. Too small to worry about? Or small enough to let go?
“By operating as two distinct and optimised companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” said Warner Bros Discovery president and chief executive David Zaslav in a press release.
Warner Bros Discovery chief financial officer Gunnar Wiedenfels, who will become president and chief executive of global networks, said: “This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles.
“This will also allow each company to pursue important investment opportunities and drive shareholder value. At global networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximising our network assets and driving free cashflow.”
The Three spokeswoman initially said: “Unfortunately, we don’t have any additional information to share on the announcement at this time beyond the press release issued from our global team.”
Pushed for a more specific response, including a comment in the context of a possible future sale, she said: “In New Zealand, we remain focused on our business priorities, including our growing BVOD [broadcaster video on demand] service ThreeNow and entertaining audiences with our strong local content pipeline.”
Sources say that for the New Zealand operation, there are still many unanswered questions, apart from the obvious first priority of the new global networks company paying down cash to exit debt as quickly as possible.
“It’s not clear whether they will look to consolidate, whether they will look to merge assets ... there’s a lot of very detailed work, operationally, to happen in the next 12 months,” one insider said.
One source believed cashflow for the New Zealand operation would be a key factor in any determination of its future.
The New Zealand media landscape has been extremely dynamic in recent months, highlighted by the board changes at NZME and Trade Me buying 50% of Stuff Digital.
While WBD exiting Three might still be some time off – and only a possibility – Sky seems a likely leading contender.
Having a free-to-air channel on Freeview channel 3 would be a lot more attractive than channel 15, as its Sky Open channel is right now.
It would help Sky enormously to have a stronger free-to-air offering in its sports rights negotiations.
Another source questioned what any potential investor would be buying. They would want to be focused on free-to-air streaming, the source said, rather than the still-expensive, traditional transmission services, which have a limited runway.
Meanwhile, the Three spokeswoman confirmed staff would be moving out of their long-time home at Flower St, in Auckland’s Eden Terrace, at the end of July.
They are moving into a building in Freeman’s Bay, where Warner Bros International Television Production (WBITVP) New Zealand also has an office.
Sky TV and New Zealand Rugby (NZR) are close to sealing a new five-year rights deal, which has seen Sky walk back, somewhat, from an earlier position on the National Provincial Championship (NPC).
Sources say the parties have agreed on the framework and are now nailing final details.
It is understood Sky has been unwilling to fully relinquish the NPC rights, after earlier speculation it was focusing on the higher-tier All Blacks and Super Rugby Pacific matches.
It is understood Sky still wants a decent share of NPC games for fear another rights holder, TVNZ, could use it as leverage to market itself as the home of grassroots rugby.
My colleague, Gregor Paul, reported yesterday that he understood TVNZ would come on board as a free-to-air partner, showing live NPC games on TVNZ+ from next year.
“The deal won’t be exclusive or necessarily extensive – how much content ends up on TVNZ+ depends on what commercial agreements can be reached between the Government-owned channel and Sky," Paul reported.
A Sky spokeswoman said this week that the company remained in “constructive discussions” with NZR.
An NZR spokesman said: “NZR remains in ongoing broadcast negotiations and we are confident of having both domestic and international agreements in place this year.”
A lawyer’s defamation court victory against Horse & Pony magazine has been thrown out by the Court of Appeal, and a retrial has been ordered.
In a ruling on Thursday, the court says there has been a “risk of a substantial miscarriage of justice” with the way a High Court jury heard certain information.
It says evidence provided by former TVNZ news boss Bill Ralston – in support of lawyer Kristin Cato, who claimed she had been defamed by the magazine – was irrelevant to the jury’s task and “unfairly prejudicial”.
The decision is an important case for the media industry in that it covers a number of principles, including the public interest defence and the level of damages awarded to Cato by the High Court.
Here’s a dilemma for the writers of our longest-running drama. How do you write the annual cliffhanger episode of Shortland Street, six months in advance, if you don’t know whether there will be a season to follow?
Or if some of your key actors have found work elsewhere in the interim and might not ever return?
Shorty’s cliffhanger episodes have become well-known – they even have a Wikipedia page devoted to them. From the sublime to the ridiculous, they are designed to leave viewers waiting in anticipation over summer for another year of mischief, mayhem and even murder.
Key stars have come and gone during cliffhangers. At the end of 2022, the entire Shortland Street hospital went up in flames in a wildfire.
This year, however, Shorty’s writers are facing a huge challenge on a number of fronts.
Firstly, there are concerns the show might not return at all for 2026.
Secondly, because the production cycle for 2025 has been so much shorter – funding cutbacks have seen the show cut from five nights a week to three – the production team are about to wrap up the entire year’s work.
The writers and producers are having to complete their cliffhanger episode some six months earlier than usual.
Workers, including actors, are also on new-look contracts that will soon come to an end, even though the show – now in its 33rd season – will continue screening until the end of the year. All of the episodes will be in the bag.
They are no longer fulltime staff and will therefore be free to explore new opportunities.
After all the uncertainty over whether the show would return this year, the staff are now facing another uncertain period.
That includes waiting to see whether the show’s producers will request – and receive – funding from NZ on Air again. This year, the agency contributed $3 million to the overall production costs of keeping the show on air.
Shortland Street also received a 40% screen production rebate, after the Government tweaked the settings to allow the drama to qualify.
That assistance lifted the show from its deathbed.
Effectively, it meant the annual costs TVNZ paid for the show – which one source estimated to be about $20m – came down to about $8m.
Media Insider put a range of questions to TVNZ and Shortland Street producer South Pacific Pictures and specifically asked TVNZ if it was keen for the show to continue.
“We are working through plans at the moment for what 2026 might look like, as well as the financing plans for the next season,” a TVNZ spokeswoman said.
“Given we are only a few months into the new season and new format, our major focus is delivering 2025 first.
“We made changes to Shortland Street’s format to enable the show to continue in 2025. This included reshaping the series into a three-episode-a-week format.
“The result is a shorter production period and South Pacific Pictures has made changes to cast and crew on permanent employment terms in line with this, with some moving to contractor terms.
“This is a standard arrangement in the production sector. Shortland Street’s cast and crew have unique and show-specific experience. Our intention is that they continue to bring this to production on an ongoing basis.”
I went back to TVNZ and said: “Sorry, just to be clear – at this stage, you want Shortland Street back for next year, or is that a decision that comes later?”
The spokeswoman said: “We’re working through the commissioning process now, as we would for any local show. We’ll be in a position to comment further once that’s completed.”
I asked South Pacific Pictures how writers juggled challenges, such as the “cliffhanger” episode.
What happens, for example, if Michael Galvin (who plays Dr Chris Warner) and other stars who are coming off contract now find new work in the next six months, never to return to Shorty?
They can’t feature strongly in the cliffhanger episode, presumably.
“All great questions – welcome to our world ... I’m not going to get into any detail on how we are handling all of these things – except to say we are handling them, because that’s the job,” South Pacific Pictures chief executive Kelly Martin said.
“We are endeavouring, as we always do, to look after our people as well as we can and we are keeping everyone who works with us on Shortland Street as informed as we can. That is our priority.”
Shortland Street producer South Pacific Pictures (SPP) has posted a $1.43m after-tax profit for the 12 months ended December 31, 2024 – down from $2.63m (-45.6%) the previous year.
The pressures in the film and TV sector are best reflected in SPP’s revenue line, down from $55.98m in 2023 to $40.29m last year.
“In the current economic environment, posting any kind of profit is a win – especially in this industry,“ SPP chief executive Kelly Martin told Media Insider.
“You are well across what’s happening with NZ broadcasters, our results are a direct follow-on from what’s happening in the sector.”
The death of former All Black Stu Wilson this week rekindled many memories of his feats on and off the field.
As well as their try-scoring escapades, Wilson and Bernie Fraser produced one of the best rugby memoirs, under the guidance of sportswriting legend Alex Veysey.
It was funny and refreshingly honest, and it’s back on my reading list.
Wilson and Fraser were banned from rugby for seven years after daring to accept royalties for the book in 1984, in a show of principle. It wasn’t a lot of money - a couple of thousand dollars each, according to one interview - but it allowed them to have a sociable few months, Wilson once quipped.
A few years after their ban was lifted, the game turned professional. Wilson certainly gave back to the sport, including with his media work and a typically honest style of commentary.
Creative advertising firm DDB is cutting five roles, with the departure of its respected managing director also announced.
The cutbacks are a sign of traditionally big-brand advertisers easing back on their spending. That included fewer big-brand TV campaigns, one source said.
“Those big-brand movements were always the equivalent of the classified ads for news companies,” the source said. “When you don’t have that certain revenue, you have to look elsewhere, and it’s anyone’s guess how ad agencies reinvent themselves without that set play revenue.”
According to Campaign Brief, DDB Aotearoa’s notable work in 2024 included campaigns with McDonald’s (’Loved by All’; ‘Fax-4-Kiwiburger’; ‘Driver Tax’ and ‘Ad-ons’); Volkswagen NZ (‘The Greenprint’; ‘Electric Trade-in’), Samsung NZ (‘Different’); Live Ocean (‘The Real Watergate’); Lotto NZ (‘Missing House’) and Vogels (‘Neighbours’).
DDB Group Australia and New Zealand chief executive Priya Patel confirmed the departure of managing director Nikki McKelvie “after 13 amazing years”.
“We are incredibly grateful for her contribution and the positive impact she has had on our agency and clients and look forward to seeing what she does next.”
The company confirmed five roles had been disestablished.
“At DDB Group, we are looking at our business holistically and making adjustments in line with shifting consumer behaviours, client needs and tech advancements,” Patel said. “This includes an expanding remit in the development of new AI [artificial intelligence] technology, which we are building in-house for clients around the globe.
“Unfortunately, a handful of roles across the business have been disestablished at this time; but the resulting structure has deeper integration of brand, data, tech, social and customer capabilities.
“Our remaining team of 230 staff are focused on delivering world-class creative thinking and we are excited to continue to evolve our model in partnership with our clients.”
James Blair had stepped into a newly created DDB Group managing director role.
“His remit is to oversee the teams across the DDB, Track and Tribal businesses and bring the right balance of specialism and integration to our clients. Mango’s structure remains the same under the leadership of MD Sean Brown."
The awards keep on coming for Kiwi PR agencies on the global stage.
TBWA New Zealand was last night awarded the top overall Grand Prix for Agency of Excellence at the PR Awards Asia-Pacific 2025, hosted by Campaign Asia.
It won several medals, including a gold and a silver in the best sponsorship/partnership category for its “Auckland Forever” campaign, in which more than 200 limited-edition Auckland FC “Day 1” football shirts were hidden across Auckland for fans to find.
It was also a huge night for One Plus One Communications, named the best boutique PR agency in the Asia-Pacific region.
The prize follows One Plus One’s big win at the local Public Relations Institure of New Zealand (Prinz) Awards, where it was named large New Zealand agency of the year for the second year in a row.
“For both myself and our founder, Kelly Bennett, this is a real career highlight. We’ve always had a lot of ambition for One Plus One and over the last few years, we’ve had the privilege of feeling it all come together," said One Plus One general manager Max Burt, who was in Hong Kong to collect the award.
“The depth of our team, calibre of our clients, and quality of our work is something we’re really proud of – and we don’t take it for granted.”
The award was given to One Plus One on the balance of its strong commercial performance through a recession, the breadth of outstanding client work, and a clear commitment to workplace culture.
Bennett said: “It’s incredibly special to be recognised as a market-leading PR agency both in New Zealand, and now the Asia-Pacific region. I’m deeply aware that ultimately we’re a people-based business; we’re only ever as good as our people, our relationships and our clients. I feel that now more than ever, and couldn’t be more proud.”
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.
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