Financials released this week show that global entertainment giant Discovery paid millions of dollars for the MediaWorks TV arm.
MediaWorks results for the year ended December 2021 show Discovery paid $20 million cash plus $3.5m in receivables.
This figure came in just above the book value that MediaWorks had assigned to the TV arm in its valuation.
MediaWorks financials showed a $4.8 million loss for the year on the back of $184m in revenue. The revenue was down $2 million from the amount recorded before.
The sale agreement between MediaWorks and Discovery went through in September 2020, but these financials offer the first glimpse at the amount paid for the historically loss-making television arm of the business.
The deal included entertainment channels Three and Bravo, streaming service ThreeNow, and multi-platform news and current affairs service Newshub, as well as other channels Three+1, Bravo+1, The Edge TV and The Breeze TV.
Speculation in the industry at the time was that Discovery would not pay much for the loss-making business, simply taking the liabilities away from MediaWorks. Much of this was ostensibly driven by the $1 sale of the Stuff news business.
The actual figure shows that Discovery still saw decent value in picking up the property – albeit far less than the $700m market cap the full MediaWorks commanded on the stock market in 2007.
Since its acquisition, Discovery recently undertook a restructure of its business across Australia and New Zealand.
The focus of this restructure was largely to cut the inevitable duplicate roles that exist across the combined Australian and New Zealand operations.
While MediaWorks will be pleased to have divested the television arm at a decent price, the company, like all media businesses, still faces a few challenges on the horizon.
In a note combined with the financial statements, the independent auditors PWC point out that the company to support its operations is dependent on its ability to finalise its plans to obtain new funding or obtain alternative funding before the maturity of existing debt facilities on January 12, 2022.
MediaWorks CEO Cam Wallace told the Herald earlier this week that the company was looking into a number of options in regard to its capital structure.
"We are currently assessing our capital structure and how this can best contribute to the ongoing growth and success of the business.
"We expect this work along with a broader strategy piece to be completed within the year."
The business was able to pay down its debt last year by 24 per cent to $84.45m – a level that MediaWorks chief operations officer Jeff McDowall said he was comfortable with, particularly after signing a recent agreement with a New Zealand-led banking syndicate to refinance existing debt.
MediaWorks has also outlined ambitious plans to make a few acquisitions in the coming year.