Stuff, New Zealand's popular media group, sold for Rs. 46
Stuff Limited, one of New Zealand's largest media organizations, is set to be purchased by its CEO for a single NZ dollar (61 cents). The deal comes as part of an effort to shift the business of the media giant to a staff ownership model and continue local journalism even amid ongoing financial woes. Here are more details.
A few hours ago, Stuff CEO and former journalist Sinead Boucher announced the plan to take over the company from its Australia-based parent company, Nine Entertainment, for NZ $1. The 'management buyout' deal was confirmed by Nine in a statement to the Australian stock exchange and is expected to be completed by the end of this month, according to media reports.
As part of the deal, Nine Entertainment will retain the ownership of a printing plant in Wellington and lease it back to Stuff. Plus, it will also get profits from the sale of Stuff Fiber, the internet business of Stuff. "It is our firm view that this is the best outcome for competition and consumers in New Zealand," said Nine CEO Hugh Marks.
In a statement, Boucher said the deal would ensure a "sustainable future for local journalism" and give employees a "direct stake in the business as shareholders". "It does give us a sense of being more in control of our own futures and that the sacrifices that people have personally made are for something that we will have more control over," she told The Guardian.
Stuff sells newspapers like Wellington's Dominion Post and Christchurch Press and runs a website (stuff.co.nz) with an employee-base of nearly 900. However, the company has been struggling with financial challenges, especially in the wake of COVID-19 which has hit advertising revenues. The staff of the company had to take a 15% pay-cut to help weather the storm, while Boucher accepted a 40% wage-reduction.
The situation is so bad that many media companies have decided to shut down. This includes Australian Associated Press and Bauer Media, both of which have decided to halt part of their operations. NZME, Stuff's rival in New Zealand, is also firing 200 employees.