We have become all too familiar with New Zealand media company interim and full year reports oozing red ink, so it was pleasant surprise to see three of them reporting profits last week.
The biggest earner by a large margin was Sky, which announced its net profit had risen two per cent to $41.8 million on revenue that was up a solid nine per cent to $826 million. Over the past three years its share dividend has more than doubled.
Sky’s biggest drawcard is its sports offering and it added icing to the profit announcement by disclosing that it has secured rights to English Premier League matches. It also has long-term contracts with rugby, cricket, league and the Olympics.
Then NZME waded in with a post-tax half-yearly profit of $6.6 million that reversed a $400,000 loss for the same period last year. Radio was its standout performer, with operating revenue growing eight per cent to $61.8 million, significantly ahead of its publishing revenue.
Finally, TVNZ reported a profit of $16.3 million and an end-of-year dividend of $2.2 million. In total the state-owned company contributed close to $4 million to the government coffers in 2026.
Less pleasant was the realisation of how TVNZ and NZME achieved their profits.
TVNZ’s profit was due more to accounting than improved financial performance. There was a positive non-cash impairment adjustment of almost $25 million. Its operating earnings were, in fact, down by $23 million. Advertising dropped more than eight per cent, and total revenue declined more than $18 million to $263 million.
The broadcaster is taking hits as it invests heavily in its digital and streaming strategies. It will benefit from those investments in the longer term but, for now, they come with some pain. We have yet to see full accounts (so far we have seen only a media release with topline numbers) and they will give further insights into the impacts of a changing market and how TVNZ is adjusting.
However, the strategy is consistent with those of other television broadcasters. Last week Australia’s Nine Entertainment, owner of Stuff before it was sold to Sinead Boucher for one dollar, posted a profit increase of seven per cent but stated that television advertising revenue was down nine per cent. Nine said it was steering its focus away from its legacy linear tv network to streaming, outdoor advertising and digital publishing.
NZME’s profit upturn was not due to a significant income boost. Its revenue for the half-year has increased by less than one per cent (to $165 million). And, while its audio and digital revenue was up, print publishing income was down five per cent to just under $52 million – well below the broadcasting sector it once eclipsed.
The company’s profit improvement was due almost entirely to reduced expenses. The most significant component of its cost cutting came in what it terms “people costs”. It shaved almost $5 million off its wages and associated bills. A further $1 million (out of total cost savings of $6.5 million) came from reduced printing and distribution costs that were almost certainly a result of a nine per cent drop in print subscriptions. Like TVNZ, it is in the process of shifting the balance of its operations toward digital services.
Stuff is a private company and does not publish financial results, but it is almost certainly in a similar position to other traditional media companies. The disclosure last week that eight journalists in Stuff Digital are to lose their jobs (in a restructuring that will see 19 positions consolidated to 11 roles) attests to the fact that it, too, is having to adjust costs in a tough market. Stuff Digital may also be coming under pressure from Trade Me, which took a 50 per cent holding in the company last year and which will be looking for a return on investment. That would explain why the cuts are being made in that company rather than in the masthead company still wholly owned by Sinead Boucher and in which Stuff newspaper titles reside. That, surely, is where the greatest cost pressures must lie
Even state-funded Radio New Zealand has felt the squeeze after two consecutive years of budget cuts. Last month it confirmed it planned to cut staffing by 10 per cent.
Attempts by our media organisations to cut costs are understandable. The commercial entities have a constant battle to stay afloat in a market that has been hijacked by transnational digital platforms like Google and Facebook. Those transnationals now take more than 60 per cent of New Zealand’s total advertising spend of $4.1 billion and make risible contributions to both the nation’s taxes and its journalism. The state-funded bodies like RNZ and Māori media have suffered at the hand of a coalition with ideological issues over their existence.
However, our media organisations all know that cost-cutting is no long-term strategy. Sooner or later, they reach the point where there are too few resources to maintain even the most basic services. It becomes a war between established public needs and strategic redirection.
This is a war in which journalists remain on the front line. Their ranks have been thinned alarmingly and there are few signs that reinforcements will arrive in time to prevent some parts of the front from collapsing.
The National-led coalition has done nothing to sustain the country’s journalism. I’m cynical enough to think that the decision to allow TVNZ to carry advertising on Sundays was in the hope of a return to dividends rather than a better-funded newsroom. If a like-minded government emerges after the election, our media will again be expected to go it alone.
I have grave doubts that our media organisations would be able to sustain a further three years of cost cutting without fundamentally undermining the sort of journalism on which a democracy relies.
After a lifetime participating in and researching the field of journalism, I have no doubt of its importance. Sometimes though, I feel that journalists naïvely think the public understands and appreciates their endeavours when, in fact, Joe Blogs hardly gives them a second thought. The public may well need educating on the consequences of the collapse of the journalistic front line.
Our news media are always ready to signal cuts in the ranks of their competitors but have a poor record of collective endeavours to alert the public to the consequences of the erosion of newsgathering and inadequate scrutiny of power. They will highlight their own endeavours but seldom explain the combined benefits that journalism brings to New Zealanders.
Stuff’s Our Impact Report (you can read the latest update here https://interactives.stuff.co.nz/impact-report/2026/ ) is an annual indication of the contributions its journalism makes to a society. I like to see that sort of retrospective even though the report clearly has a promotional role for the company. But writing this commentary led me to reexamine it from a different standpoint.
What if we did not have journalists to ferret out stories such as those highlighted in the report? Would allegations against New Zealander of the Year Sir Rod Drury have been investigated? Would financial discrepancies in NZTA roading contracts have been investigated? Would Auckland Airport taxi drivers have been investigated over double charging? Would the issues of ordinary citizens, submitted to Solving Stuff, have been dealt with?
I doubt it.
News media organisations, beyond those that are directly funded by the state, have two responsibilities to which they must give equal weight if they are to enjoy market and public confidence. One is to their shareholders who rightly expect a return on their investment, and the other is to principled journalism in pursuit of the public’s right to know.
Neither will be realised if the colour of ink on six-monthly and annual accounts is determined by how much can be cut from operating expenditure. They need help.