The Government’s $50-million media package announced today has bought broadcasters some time, but it could put nails in the coffins of some of our print titles.
Little in the package assists newspaper and magazine operations to overcome the disastrous decline in retail advertising that accompanied the Covid-19 lockdown.
Three-quarters of the package directly benefits broadcasters, principally through the waiving of transmission and NZ on Air fees. That is welcome.
There is an $11 million sum set aside for ‘specific assistance’ but that is industry-wide and represents little more than what New Zealand Herald publisher NZME earned per month in print advertising last year.
The only newspaper-specific element of the package is Government support for the Local Democracy Reporting pilot that put eight reporters in regional newsroom around the country. That will not save any other jobs in those newsrooms or in their metropolitan stablemates. Nor will the $1.3 million to purchase news media subscriptions – although it will be welcomed by the likes of Newsroom Pro and BusinessDesk.
The need is for cash…and cash now.
The biggest single issue facing commercial media in this country today is cashflow. Put simply, they are scratching the bottom of the barrel to pay wages and other fixed outgoings.
The package has guaranteed broadcasters’ means of distribution for six months. Nothing guarantees that newspapers and magazines will be able to be printed and distributed over that period.
Communications Minister Kris Faafoi has signalled a second package that could see upfront advertising spending by Government and the redirection into local media of some of the $33 million spent a year on international social media. I firmly believe the sum is bigger than that, but a slice of $33 million would be a Godsend to our commercial media, and newspapers in particular.
However, that package will take its place in the May Budget queue – a line that will extend from the door of finance minister Grant Robertson’s office, down the stairs, out the Beehive door, and along the length of Lambton Quay. How much of it will survive the Budget process and will it be too late?
In front of the Epidemic Response Select Committee last week I spoke of New Zealand’s media sector being in existential crisis. That dire prediction was based on a number of factors. One was the effect that 50-75 per cent drop in revenue would have on companies already burdened by long-term decline. Another was the fact that significant sections of our major commercial media – Stuff and the TV arm of MediaWorks – are unwanted (and unloved?) by their foreign owners. They live under the ominous shadow of a precedent set by German publisher Bauer, which unceremoniously closed this country’s most iconic magazines before the Covid-19 crisis had a chance to sneeze.
I told the committee that these companies are not too big to fail but they are too important to fail. That may not be a view held by their overseas owners, but it certainly should be a view held by Jacinda Ardern and her government.
Today’s package may have bought some time for TV3 although private equity owners – like MediaWorks’ shareholders – do not have reputations for long-term patience. However, it has not given Stuff the injection it needs to not only keep titles like the DominionPost, Press, Waikato Times, Taranaki Daily News and Southland Times publishing but also to hold Australian owner Nine Entertainment at bay. Nine has made no secret of the fact that it wants out of New Zealand.
Bauer’s callous closure of its New Zealand magazines demonstrated how easy it is to walk away. The shutdown order from Hamburg was a journalistic and cultural disaster for this country but it happened. It would be catastrophic if that move emboldened Nine to follow suit.
The Australian entertainment group has been on a buying spree to acquire assets in its home patch. The latest suggestion is that it may be eyeing the cinema parts of Village Roadshow. This continental focus and the financial burden associated with acquisitions makes the position of Stuff more tenuous. The intention to sell Stuff sees it listed in the Nine Entertainment Company’s consolidated financial statement under “discontinued operations”. That is an ominous place to be.
Beyond TV3 and Stuff there are numerous other entities that have a tenuous hold on the future – magazines, community newspapers and local radio stations among them. Some community papers forced to close under Covid-19 Level 4 may not reopen and others will be weakened versions of their former selves.
Money is only part of the solution. The Government must also find new ways to help media organisations to help themselves. First, however, it may well need to institute Stage one-plus to ensure our most vulnerable media are still there to reap the benefits of stages two and three. – Gavin Ellis