Samantha Hayes and Mike McRoberts fronting the final Newshub Live at 6pm bulletin. Photo / Three
Samantha Hayes and Mike McRoberts fronting the final Newshub Live at 6pm bulletin. Photo / Three
The dire state of Warner Bros Discovery’s New Zealand finances has been laid bare – a massive $138 million loss in 2023, including a $79.5m impairment.
The media company’s finances, released today, paint the starkest picture yet as to why it was forced to close Newshubearlier this month – with the loss of almost 300 jobs.
The financial documents reveal Warner Bros Discovery’s (WBD) US giant parent company has committed to a minimum 12 months’ further financial assistance – the future of the company after that may well rest on whether its new strategic direction is working.
The company’s net loss of $138.2m compares with a $35m loss in 2022.
Revenue in 2023 was $132m, a drop of 17% from the $159.6m in 2022 – another stark sign of the TV advertising market in New Zealand.
The documents also reveal that a total of $14m will be incurred in redundancy costs this financial year (to December 31, 2024) – the result of the Newshub closure and other job cuts.
In an auditor’s report attached to the financial documents, PricewaterhouseCoopers says: “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, along with the other matters set out in note two, 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.”
Warner Bros Discovery operates Three and ThreeNow, and several other streaming brands.
Media company Stuff now produces the 6pm news for Three, which is now called ThreeNews.
Samantha Hayes is hosting the new-look ThreeNews bulletin on weeknights.
Warner Bros Discovery employs 150 staff across New Zealand and Australia.
Notes on the financial statements say the company has recognised impairment losses on programme rights ($43.1m); property, plant and equipment ($12.9m); intangible assets ($9.5m) and right-of-use assets ($13.8m).
In a statement today, a WBD spokeswoman said: “These statements are not a complete and accurate assessment of the business in New Zealand, but rather a local statutory reporting view.
“Warner Bros Discovery does not comment on individual entity performance, but we do recognise the business in Aotearoa has faced significant challenges, largely as a result of the macro-economic and advertising environment.
“It is as a result of these challenges that we initiated a remodel of our free-to-air operations to minimise future losses and set the business up for future success.”
The spokeswoman said the company was already “seeing success” with its pivot to a digital-first strategy.
“ThreeNow is New Zealand’s fastest-growing BVOD platform, and in H1 of this year, we are up significantly in all of our key metrics YoY, including total hours consumed (up 70%), new registrations (up 51%) and average weekly account reach (up 48%).”
Married at First Sight Australia is a popular Three and ThreeNow show.
As to the auditor’s notes, the spokeswoman said: “This statement has been included in each of our financial statements since 2021. This is set each year on a 12-month basis as it is an annualised commitment. Following significant challenges we initiated a remodel of our free-to-air operations to minimise future losses and set the business up for future success.”
The documents reveal the company had net liabilities of $132.6 million – in 2022 it had net assets of of $4.5m. It had negative working capital of $124.5m, cash balances of $13.9m and bank overdraft balances of $102.3m.
In further notes on the recent restructuring, the document said: “As of the signing date of the financial statements, the directors are in the process of executing the restructuring plan and assessing the relevant commercial and contractual arrangements to determine the full extent of the impact on the business.
“As the company is still winding down certain impacted operations, major contracts with vendors and customers cannot be exited immediately, and therefore an estimate of that impact, which will be subject to commercial negotiations, cannot be made at the signing date of the financial statements.”
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.
