from Cranmer’s Substack

Yesterday marked the third anniversary of Sinead Boucher’s acquisition of Stuff Media from its Australian owners but questions remain unanswered about the media group’s governance structure and the identity of its backers.

As the general election looms, the media will play an increasingly critical role in presenting the political personalities and issues to the New Zealand public. The manner in which those stories are framed will undoubtedly have some influence on the outcome. So before we cast a critical eye over our political parties and their offerings, it might be worth considering the state of our media, and in particular, the state of Stuff.

Stuff claims to be the country’s biggest news website. In one of its articles in March it stated, “Stuff has held on to its national leadership position and has the biggest Auckland audience, according to the latest Nielsen data. Stuff is read by nearly 3.4 million Kiwis a month across print and digital, and is New Zealand’s number one news website. Every month 2.6 million New Zealanders read a Stuff newspaper or magazine.”

But three short years ago, it was a different story. Its former owner, the Australian media group Nine Entertainment, had started a sales process to dispose of the New Zealand business. The owner of the NZ Herald and NewstalkZB, the publicly listed company NZME, had indicated an interest in acquiring the business and had begun negotiations in September 2019 although the potential merger raised obvious competition issues which required Commerce Commission approval.

Sensationally, however, Nine abruptly terminated the two week exclusivity period that it had granted to NZME in early May 2020 and instead agreed a last-minute deal to sell the business to Stuff’s chief executive at the time, Sinead Boucher. It prompted NZME to seek injunctive relief in the High Court in a desperate attempt to enforce its exclusivity period. Justice Katz ruled against NZME and the deal with Boucher closed at midnight on 24 May.

During the Court proceedings, Nine indicated that it considered the New Zealand business to be a “failing firm” and that it intended to close the business at the end of May if it could not find a buyer. In Nine’s opinion, there was no reasonable prospect that the Commerce Commission would approve the merger with NZME within that time period and there was no political interest to help facilitate the deal.

Stuff disputed Nine’s characterisation of its financial position in Court although Boucher did state in her affidavit that, “although the trajectory of Stuff’s business has been declining in recent years it had remained generally profitable”.

Justice Katz decided to suppress Nine’s description of the business as set out in the Court papers for six months “to give it ‘some clean air’ to put its recent difficulties behind it and move forward with its new strategy.” Once suppression was lifted Boucher reiterated in the press the view that, “management did not support the description of Stuff as a ‘failing firm’ as part of the efforts by Nine and NZME to get a sale approved by the Commerce Commission”.

Nine’s deal with Boucher included cash consideration of $1, together with ownership of Stuff’s Petone printing plant being transferred to Nine with a leaseback to Stuff, and the proceeds of the Stuff Fibre sale to Vocus. In a statement to the Australian Stock Exchange, Nine confirmed that it would receive 25% of the proceeds of the Fibre sale before completion of the sale of Stuff to Boucher, plus up to a further 75% of the Fibre sale proceeds over the subsequent 36 months, “depending on the Stuff business’ ability to raise funding”. BusinessDesk reported at the time that this resulted in Nine leaving up to A$5.8 million in Stuff after the Fibre sale.

What was unclear at the time was whether there were other interested bidders for Stuff. It has since emerged, however, that at least one other credible New Zealand-based party, in addition to NBR owner Todd Scott, formally expressed its interest to Nine’s lawyers regarding making a bid for the business. The fact that Nine did not engage with that party inevitably raises questions about the factors that influenced the deal with Boucher.

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It’s pretty clear to us and many others that without the tens of millions of dollars of Labour Government bribes (both direct and disguised in the form of government paid advertising for covid lockdowns and that substance, NZTA’s Wokeism, Maori rolls, etc.) Ms Boucher’s business would be, well, Stuffed. It’s one thing to be politically partisan — all of America’s Legacy Media are, mostly pro-Democrat — it’s another to piss off a lot people who used to be readers/watchers/listeners but no longer are because the content has become shoddy, unreliable and blatantly one-sided.