The sale of MediaWorks, or at least some part of it, appears to be getting closer.
In a story that slipped past local media, The Australian newspaper this week reported that MediaWorks has an offer from Australian billboard company QMS.
MediaWorks, which is owned by US fund manager, Oaktree, has been on the market for some considerable time.
CEO Michael Anderson has been looking for buyers since he took over two years ago after previous CEO Mark Weldon couldn’t get a deal done.
Part of the problem has been the high price tag Oaktree has placed on the business which includes the TV channels Three and Bravo and Radio stations such as The Edge, More FM and The Breeze.
But Anderson and Oaktree might be becoming a bit desperate as the share of advertising market commanded by free-to-air TV continues to decline and TVNZ with its dominant market position competes hard on price.
A wave of consolidation is sweeping through the Australian market after Nine Entertainment’s bid for Fairfax which owns some of the country’s biggest newspapers and a highly profitable property website.
Anderson and Oaktree won’t want to miss the boat this time.
QMS, according to The Australian’s mergers and acquisitions editor Bridget Carter, is keen to buy media assets after missing out on a recent round of outdoor advertising industry consolidation.
QMS has a sizeable New Zealand operation and analysts told The Australian they believe the move to buy a television broadcaster would offer opportunities for video content creation for its digital billboards and cross-promotional opportunities between radio and outdoor advertising.
With a market capitalisation of $NZ350 million QMS might struggle to buy MediaWorks outright and Oaktree has been reluctant to split off its various arms as TV would be lucky to survive without radio.
Adding a wildcard to the negotiations is the possibility of a bid for MediaWorks by American giant NBC Universal.
A New Zealand Herald story has speculated that NBC Universal is interested in buying both MediaWorks and Sky TV. Mediaworks is already involved with the American company though the joint ownership of Bravo – the old TV4.
NBC was also an original shareholder in TV3 but got burned when the start-up broadcaster went broke soon after its launch. A local analyst familiar with the TV market doubted that NBC would be interested in another foray down under. He suggested that sometimes rumours are seeded into the market in the hope of pushing up the price of the genuine buyer.
MediaWorks told Newsroom it had no comment on the sales process.
Latest audience figures provided to Newsroom for online media sites show a big gap between the market leader Stuff.co.nz and nzherald.co.nz is proving hard to shift for the second-placed, NZME-owned Herald.
The monthly unique audiences for September, measured by Nielsen, show Stuff slipped slightly to just under the 2 million reader mark at 1,974,000 – but its lead over the Herald, which was down to 112,000 in March has hit 408,000, with the Herald registering its lowest monthly audience for years at 1,566,000.
As this column has noted, the two sites have adopted different strategies lately, with Stuff remaining focused on its total audience and the Herald adjusting to introduce a part-paywall where some of its premium content would not be available to all readers. But the ‘delta’ opening between the two audience figures on any graph of the Nielsen results would be a worry for the commercial side of the business which still deals in audience eyeballs to raise advertising revenue.
Some publishers have their misgivings about the Nielsen data, but to paraphrase Winston Churchill on democracy, it is the worst measurement of online audiences apart from all the others that have been tried. An alternative measure, Google Analytics, often overestimates audiences as it seems not to de-duplicate repeat visitors to sites (or the same visitors from different devices). Monthly uniques remain the currency for millions of dollars in advertising spends here and in markets such as Australia, the UK and the US.
TVNZ’s 1News website ended a poor couple of months by increasing its audience by 120,000 to 821,000 in September, putting it back in the race against Newshub (840,000) to be third biggest NZ news site.
RNZ was on 422,000 (up 6000), the Otago Daily Times held steady at 236,000 and among the small players (which Nielsen cautions are vulnerable to big movements up and down because of the unreliability of data from its sample) this website, Newsroom had a jump from 81,000 in August to 133,000 in September and The Spinoff was down 10,000 to 127,000.
If you’ve been on the edge of your seat waiting for the June quarter ABC circulation figures for newspapers, sit back. The newspaper industry has moved to twice-yearly reporting of the sales numbers, bringing it into line with magazine publishers, and the next numbers to emerge will be those for the September 30 half-year in November.
The circulation numbers have long been grim reading here and elsewhere for newspapers. They measure actual sales of physical copies of the paper, not the readership of a paper, which is calculated by a formula which is as mysterious as Nielsen’s online audience measurements. Usually papers have three or so readers for every one copy in circulation.
So reducing the public reporting of sales figures from four times to twice a year will give publishers some relief from the ever-falling numbers going into letterboxes and out of dairies and service stations. The downside is the level of each ABC release’s fall could seem more substantial.
Newspapers now tend to define their audiences by a blended analysis of newspaper and online readership, reported either as a daily or weekly combo.