Here are the words of Warner Bros. Discovery’s two key executives who fronted an all-staff meeting today - and outlined the proposal to close Newshub from June 30.
GLEN KYNE, Warner Bros. Discovery head of networks (NZ, Australia, Japan)
Folks, this is awful.
When MediaWorks sold TV3 to Discovery we all breathed a sigh of relief, thinking that at last we could stop having that awful feeling of walking into work every day believing it might be our last.
We had breathing room, and we had a clear strategy, and we had an amazing group of people helping us to deliver on that strategy.
I really want to reiterate what James was touching on first, everyone with us today, everybody who works for WBD ANZ, has worked so hard, and done everything asked.
It hasn’t been easy, but you delivered on our operational plans and I am so grateful to everyone for your efforts.
The economic headwinds means the returns are not there.
This is not a reflection of anyone here, it’s that proposing changes to our operating model is the only way we could see a path for us staying viable in the New Zealand market.
Every time we think we’ve landed on stable footing, something comes along and makes it unstable again, forcing us to look at ways of further reducing costs.
Unfortunately we’ve now reached a stage where any further reduction in costs means proposing major changes.
Free-to-air and news are expensive businesses to run and the New Zealand market is distorted.
So, what does this mean we are proposing?
We know this proposed change is radical, but if implemented in its current form, Warner Bros. Discovery would remain committed to retaining a local presence, albeit with a much smaller operating model and lower cost base.
Over the past year, we’ve been very clear about our intention to transition our business to a more digitally-led model.
This proposal is very much in line with that, and one we believe is financially sustainable for the long-term.
The proposal is that ThreeNow would be at the core of the future business, supported by the FTA linear channels.
ThreeNow and Three’s programming would centre around three core pillars:
Bravo, Eden, Rush and HGTV would continue in their current form with the same content slate.
As James said, we are proposing to shut down the newsroom. This would mean stopping all news production including the website from June 30.
It is so difficult to fathom that proposing these changes is necessary.
We all know that Newshub has been such an important and central part of who we are at TV3 since day one.
We also know that Newshub is a crucial part of a functioning fourth estate in New Zealand as a whole.
Unfortunately this proposal would obviously mean significant impacts on people across many teams in the business.
But our current environment means that we cannot go on as we have.
These proposed changes are hard, but what we think is necessary to maintain a sustainable operating model in FTA in New Zealand.
I could go on about how much we’ve all done, and how hard we’ve all worked, but I know in the end this is a terrible announcement.
There is no sugar-coating it, and I wish I could be standing up here with better news.
JAMES GIBBONS, Warner Bros. Discovery APAC president
Thank you all for joining us today.
As we said in the email this morning we are proposing to make some significant changes to our New Zealand business.
I’m sure you’re all anxious to hear what these are, and I will share more details with you very soon.
But it’s important to give you some context first.
Everyone can see that the media sector, here in New Zealand, and around the world is facing some very, very tough circumstances.
Just about every sector is struggling with economic turmoil.
Impacts of these downturns have been severe, and the bounce back has not materialised as expected.
Advertising revenue in New Zealand has disappeared far more quickly than our ability to manage this reduction, and to drive the business to profitability.
Yes, Warner Bros. Discovery is a large global media company.
But each business is managed on its ability to sustain itself within the market it operates in.
Subsidising losses for ongoing years indefinitely is not sustainable.
The stark figure is that nearly $100M has left the advertising sector in New Zealand in the last 24 months and that trend is continuing into 2024.
What this all boils down to is that the current business model is not financially sustainable for the long-term – and we need to make some significant changes.
So today, we are opening consultation on a proposed new structure, which we believe would be financially sustainable for the future.
This proposed new structure reflects Warner Bros. Discovery’s commitment to retaining a local presence.
The proposed model would have a much smaller operating model and lower cost base.
If implemented, it would look very different from our current operations but would be more aligned to our focus on digital transformation.
So what this means for you, is the proposed model would see a shutdown of the newsroom.
We simply cannot afford to produce news in-house. That’s the fact.
This doesn’t mean news isn’t valuable.
We just haven’t found a way to make it work financially here in New Zealand.
It is also proposed that we would no longer commission content where we fund the full cost.
However, we would continue to work with both government funders and other partners to co-fund locally produced content for our platforms.
If this proposed model went ahead, the changes would take effect from 30 June this year.
We know this is significant and a shock to hear.
Proposing to close Newshub is not something we arrived at easily.
None of the proposed changes were easy options.
We are acutely aware of our position in the local media landscape and what this means for you, our people, and for New Zealand as a whole.
As I said, there was no single trigger that caused this; rather it was a confluence of negative events.
I want to make this clear: this is not a reflection on our ANZ team.
Everybody who works here has done everything we could have asked, and executed our plans well.
The economic headwinds are simply too great without a major change.
Proposing changes to our operating model is the only way we could see as a viable path for us to continue in the New Zealand market.
I will now ask Glen to take you through the proposed new model for the business.
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