NZME says its pursuit of rival Stuff is progressing, with "active engagement" with the Government about taking on a Kiwi Share obligation.

NZME, publisher of the NZ Herald, has sought the Government's support to buy Stuff, which is owned by Australian media company Nine.

The proposal would involve the Stuff newsroom being transferred to an NZME subsidiary company in which a Kiwi Share would be held by the Government.

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"NZ First has put their support in behind the proposal and we are absolutely delighted with the engagement we are having from Government," NZME chief executive Michael Boggs said after announcing the company's full-year result.

"No decisions have been made but we are encouraged by what we are hearing," he said.

Previous plans to merge the two media companies were knocked back by the Commerce Commission two years ago because of fears the enlarged entity would have too much power and lead to a loss of a plurality of voices.

But Boggs said if this new deal went ahead it would be structured as two organisations still competing with each other.

"We would segregate the journalists and make sure that they continue to perform the best they can to compete with each other in the market to give the best journalism, the best insight but competing with each other overall. And that would be maintained by the Government holding a Kiwi Share in the entity that allows the two to compete.

"Right now, that's not agreed, but we are encouraged by what we are seeing."

NZME firmly believes it is the right owner for Stuff, Boggs said earlier.

The proposed transaction is subject to the Government's agreement to hold the proposed Kiwi Share, NZ Commerce Commission clearance, agreement with Stuff's owner Nine, shareholder approval and finance.

Meanwhile, cost-cutting measures lifted NZME's operating profit 4 per cent to $19.7 million last year but the company reported a net loss of $165.2m after deciding to impair the value of intangible assets to account for a lower share price.

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NZME, which also owns several radio stations including Newstalk ZB and online resource tools OneRoof, said a challenging advertising market continued to affect print and digital advertising, together with declines in print circulation revenue.

Revenue fell 4 per cent to $371.7m.

However, the company made progress with its digital subscription model and now has more than 46,000 NZ Herald Premium subscribers including more than 21,000 paid premium digital subscribers and 25,000 print subscribers who have activated their accounts. Digital subscriptions generated $1.7m revenue in the first eight months since launch.

Boggs said print remained the challenge. Print revenue was $192.4m in 2019 – including print advertising and circulation revenue – a decline of 9 per cent from 2018.
Radio continued to perform well, with ad revenue up 2 per cent at $110.9m and earnings were also up 2 per cent at $71.5m.

NZME shares gained 6 per cent to 35c following the result after hitting a record low of 33c on Monday.

For more on the result click here.