MediaWorks staff are in a "state of shock" after being told of plans to sell off the company's TV arm - with the network's stars and shows facing an anxious, uncertain future.

The cash-strapped company today revealed plans to sell its TV business and its headquarters in Auckland's Eden Terrace. The Flower St building houses its television head office and studios.

It is understood staff were told just six minutes before the announcement was made public.

Staff fear that if a buyer cannot be found quickly the network could be closed by Christmas this year, a source said.

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MediaWorks chief executive Michael Anderson was grilled by staff members during a tense meeting this morning, RNZ reported.

One employee told said "everyone is in a state of shock".

"It's clear they [MediaWorks] see zero value in the TV side of the business," the staffer told RNZ.

"It feels like the company is still in a state of flux.

"This whole situation is going to see us lose some key talent."

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TV presenters had been called to one-on-meetings - though some of the network's biggest names are currently away. Newshub Live at 6 anchor Mike McRoberts is in Japan for the Rugby World Cup and Samantha Hayes is on maternity leave.

The sell-off follows a concerted effort by the broadcaster to complain about its disadvantage taking on government-owned TVNZ. Just this week MediaWorks axed or reduced several comedy shows and Married at First Sight NZ.

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One casualty was comedian Guy Williams' show NZ Today.

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Comedy show Seven Days regular guest Ben Hurley joked that one of this week's two big Lotto winners might buy the network.

Seven Days - one of MediaWorks' most successful shows - was cut from 32 episodes to 12 this week.

Colin Mathura-Jeffree, who hosted Three's NZ's Next Top Model, said today his thoughts were with the staff. He hoped a buyer could save the network.

Former TVNZ presenter and occasional TV Three newsreader Nadine Higgins said today's news "just sucks".

MediaWorks concedes defeat in 'challenging' TV environment

MediaWorks, which is owned by US hedge fund Oaktree Capital, will continue to operate its radio and billboard advertising businesses.

The company posted a $5.5 million loss for the 2018 year.

MediaWorks chairman Jack Matthews said the company was committed to growing its business in New Zealand "while recognising that free-to-air television operates in a challenging environment".

"We are in a commercial environment and have to face commercial realities," he said.

"The market that free-to-air television operates in is tough and has been exacerbated this year. This is reflected in the performance of all free-to-air television operators in New Zealand, not just us."

The Flower St headquarters.
The Flower St headquarters.

MediaWorks planned to sell its Flower St building, with a possible leaseback option "for a buyer to continue to operate television from that location".

The company has now hired an adviser to "identify a list of potential purchasers and commence initial discussions".

The sell-off comes just days after The Project host Jesse Mulligan warned Three was facing serious challenges.

"What's the problem? Well, Three has a big competitor," Mulligan said on live TV.

"You will have heard of it — TVNZ. They do everything they can to take viewers off Three, and that's what they should do. But at the moment it's not a level playing field."

Mulligan also warned that MediaWorks was "out of costs to cut".

"It's not unrealistic or an exaggeration to say the next move could be for MediaWorks to close down our entire station."

Prime Minister Jacinda Ardern said that the MediaWorks announcement was a commercial decision in a changing media environment.

"Obviously that does create a period of uncertainty for a number of people working for Mediaworks, so I just really want to acknowledge that."

Asked if it was a level playing field, Ardern said: "This Government is not putting funding into the day-to-day operations of TVNZ and I think that's important to keep in mind."

She said there was a place for a public broadcaster in New Zealand, and the Government was doing work to strengthen public broadcasting.

Three's The Project report on Mediaworks' financial woes and competition with TVNZ. Video / Three

Broadcasting Minister Kris Faafoi did not want to comment as MediaWorks was a private company which made its own decisions on its commercial operations.

Faafoi does not want to interfere with process by commenting, a spokesman said.

The Government is currently in the process of working through its options when it comes to strengthening public media. Some options could include making state broadcaster TVNZ advert-free.

Faafoi has said that piece of work would be unveiled before the end of the year.

Today, Faafoi's spokesman confirmed the timing on this project had not changed, despite MediaWorks' announcement this morning.

The Project's Jesse Mulligan this week made an impassioned plea for TV Three's future.
The Project's Jesse Mulligan this week made an impassioned plea for TV Three's future.

Chief news officer Hal Crawford publicly complained in August that television in New Zealand was "broken".

MediaWorks chief executive Michael Anderson said today: "We are very pleased with the progress that Three has made over the past five years. This year we have had record ratings and revenue share highs and we are very proud of our stellar local content.

"The role Three plays in New Zealand society is significant, from Newshub through to investment in local comedy and drama. We believe MediaWorks TV is now in a place where it can be separated from the radio and outdoor business to be operated under a new owner in a more sustainable fashion - and, ultimately, for profit."