‘Economic headwinds’ force Newshub shutdown, media jobs cut in NZ

In a statement, Gibbons said there was “nothing anyone in our New Zealand networks business could have done better” to avoid the closure.

“It was a combination of very strong economic headwinds both in New Zealand and the global market,” he said.

“The downturn has been severe, and the bounce-back has not materialised as expected.”

Warner Bros Discovery first revealed its proposal to close Newshub on February 28. Newshub Michael Morrah told RNZ’s Midday Report many staff saw today’s decision as inevitable.

‘Many resigned themselves’
“The confirmation was still very upsetting and disappointing, but nothing like the shock of six weeks ago. Many had resigned themselves to the closure,” he said.

“I have worked here for 18 years. We believe in what we do. And know it is important to the people who watch — 900,000 every week. What happens to those people who relied on us to present key news and current affairs?

“And to the investigations that are being worked on?”

Gibbons said $74 million disappeared from broadcast TV advertising in New Zealand in 2023 alone. That was the single largest year-on-year drop over the last three decades outside of the Global Financial Crisis in 2007-8.

“Every business in its own market has to be financially sustainable, and we simply could not continue in our current form.”

Fresh annual figures released yesterday showed total TV advertising revenue in New Zealand TV fell from $517 million in 2022 to $443 million last year.  Digital advertising revenue is increasing but the vast bulk of that goes to offshore tech companies Google and Facebook.

Kyne said free-to-air and news operations were too expensive to run as they were. He was concerned that the move would leave TVNZ as the only service running free-to-air broadcast news, but said there was no other choice.

Impact on plurality
“We are deeply aware of the effect this is likely to have on the plurality of media voices in New Zealand. Having just one TV news operation in New Zealand — that is state-owned — will be an ongoing issue until it is solved.

“But as we noted on the day, it is simply impossible to continue operating in our current form.”

The final day for staff who have been made redundant will be on July 5, and that will also be the final day for the Newshub bulletin, the statement said.

When Newshub’s closure was first proposed in late February, staff were given six weeks to give feedback on the proposal.

“Myself and six colleagues suggested a stripped back Newshub live at 6 and retention of the Newshub (website) to transition from linear TV to a fully-digital model. We thought we had a profitable way forward.

‘We were told the option would be problematic for WBD and produce a downward trajectory for the business,“ Newshub’s investigations editor Michael Morrah told RNZ’s Midday Report.

Other alternative proposals to replace or continue Newshub were also considered amid heavy secrecy, bolstered by the use of non-disclosure agreements.

Considering proposals
In recent days media reports have indicated WBD has been considering proposals from other media companies to create a news service for the company’s channels.

New Zealand Herald media commentator Shayne Currie yesterday reported that Stuff was a leading contender for taking on the organisation’s 6pm news. Some have speculated that NZME, which owns the Herald and Newstalk ZB, could also have an interest.

WBD said today no arrangement with any third party was in place but Mediawatch understands the company has already rebuffed several and is only pursuing projects with one or two players.

Stuff reported yesterday that Stuff was “understood to be a likely contender”  but a spokesperson for Stuff declined to comment on whether it had been in talks with Warner Bros Discovery.

“The main thing is Newshub needs a lifeline. These people deserve a lifeline. Those people who are looking to do these deals, get on and get them done and save some of these people and save some news for Kiwis,” Newshub presenter Patrick Gower told reporters after today’s announcement.

Kyne said the company’s “door has been open to listening to all internal and external feedback and ideas, and we will continue to do so”.

“However, as of now, no deal regarding news output has been made.”

News archives
Kyne said the company was also looking to work with Nga Taonga to preserve its 30-year news archives.

Mediawatch understands that several staff made submissions calling on the company to preserve those archives, with fears that years of work — and New Zealand history — could be lost if they were deleted.

Newshub’s shutdown is the biggest and most far-reaching news closure in the post-covid era.

“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,” Kyne said in a statement when the closure was first proposed.

“We’ve now reached a stage where any further reduction in costs means . . .  proposing to shut down the newsroom and the Newshub website.”

“Everyone can see that the media sector, here in New Zealand, and around the world is facing some very tough circumstances. While Warner Bros Discovery is a large global media company, 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,” said Gibbons.

At the time, Warner Bros Discovery said its proposal was is to make the ThreeNow online app “the core of the model, supported by free-to-air linear channels” such as Three, Bravo, Eden, Rush and HGTV.

This article is republished under a community partnership agreement with RNZ.