A plan to rescue Newshub – on a beer budget

Standfirst: Mark Jennings was Head of News at TV3 for 22 years before co-founding Newsroom. He looks at the factors behind the decision to shut down Newshub and suggests how it might be saved.

It was sometime early in 1989.  I had been reporting for the ABC in Melbourne but had returned home to New Zealand on holiday. 

I had heard that TV3 had got a broadcast license after a long-drawn-out process and was planning to go to air late that year, but I knew little else about the fledgling operation.

I do not think that it made the news at all in Australia.

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The offer from TV3

Somehow one of the handful of news producers already hired by TV3 had heard that I was in Auckland and tracked me down.

I went to see them in a temporary office on Grafton Road.

There were not enough chairs, so then Deputy Head of News, Rod Pedersen, pulled up some empty beer crates and we sat on those.  Bottles of Steinlager were produced.  We sat yarning, but the conversation was very news-focused.

I knew I was among passionate journalists. Tough, competitive journalists.

At the end of the conversation, Pedersen casually asked if I would come back home and work for 3 National News as it was to be known.

I immediately said yes. It was a life-changing decision.

The market for journalists was really tight.  TVNZ had gone around hiring everybody they could and locking them into contracts.

Pedersen (who had worked in Sydney) and I used our contacts in Australia to hire a bunch of Aussie reporters, cameramen and editors to get us going.  The imports were used to the tough competition that exists between commercial TV stations in Australia.

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Tough competition for TVNZ

By the time TV3 went to air in November 1989, News was ready to take the fight to TV One as it was back then. And we did.

The rest of the company was not in quite such good shape.  It simply did not have enough decent programming.

Again, TV One had bought up everything it thought might be a hit show.

This has been the story of TV3.  Always battling a competitor that had more firepower.

If TV3 did win a bidding duel for content it always paid over the top for it.

All of TV3’s CEOs (and there have been many) have argued that TVNZ holds an unfair advantage in the market.

In the early days, it was the ability to sandwich TV3 between two channels. Later, it was offering deals to the big advertising agencies that took most of the money out of the market. More recently it has been forgoing paying dividends to the government and building a war chest to fund its digital platforms.

TV3’s calls for a “level playing field” were usually dismissed as sour grapes.

Going harder and further

TV3’s programmers turned to innovation on the local scene and came up with hits like Bro’town, Outrageous Fortune, 7 Days, Jono and Ben, The Secret Life of Dancers and the very successful documentary series, Inside New Zealand.

But it was never quite enough for long enough.

News was slightly different. The underdog status was advantageous. There is nothing like a team of reporters with their backs to the wall and a point to prove.

Out of this was born a culture of going harder and further than other newsrooms.  3 News (the National part was dropped) became a desired place to work, and it developed into the heart and soul of the company.

For a long time, the physical state of the newsroom (Flower Street HQ was originally a butter factory) was not flash but most of the journalists were comfortable with the idea that any spare cash was devoted to news gathering – here and abroad.

With the exception of one, the company’s various Chief Executives were strong supporters of news. The same applied to other executives who did not object when News asked for more money. They could see that it was making an impact.

Not many news bosses receive the same level of support because typically departments at a network vigorously compete for resources.

The growing digital platform

In the last ten years though, ownership has been a problem. The private equity firms that held the reins were not prepared to invest the large sums required for the transition to digital platforms.

There is a pressing need for free-to-air networks to move quickly towards switching off the high-cost legacy transmission systems and deliver content over the internet – but in New Zealand, it is probably ten years away.

The costs of maintaining all the current systems while investing in the future are killing the traditional broadcasters.  TVNZ might get there intact but Three is not going to.

Newshub is the first sacrifice on this fraught journey.

When MediaWorks sold its TV operation (Three and some other minor channels) to US giant Discovery which subsequently merged with the even larger Warner Bros, there were sighs of relief at the network’s Flower Street Headquarters.

Even when it was revealed that the local operation was losing $30 million a year, many thought it was a rounding error on the balance sheet of the huge conglomerate.  After all, Warner’s Chief Executive David Zaslav’s total compensation in 2022 was $65 million.

But that is not how business works.

It is hard to see why Discovery bought the company in the first place and even harder to discern its strategy. Many thought it would bring its expertise in streaming platforms to the local market and Three Now, but when it left all its premium shows on Sky channels, the writing was on the wall.

Channel without news

Without news, Three looks destined to become a cable channel where all the programmes are put to air from a control centre in Los Angeles. New Zealand viewers will have little to identify with and will probably desert in greater numbers than they have been already.

There seems almost no political will to help retain Newshub.

Media Minister Melissa Lee says that there are other players that might be interested in taking over or starting a news service.  She suggested Sky might be interested. This seems highly unlikely.

Warner says, “News was a loss-making operation and we could not see how that could be turned around,” but who did they consult or ask?

The company is now entering a period of consultation with news staff – most of whom say they have little hope it will result in a change of heart.

The fightback

If I was the staff here is what I would do: (a) Suggest that a slimmed-down operation move to smaller, cheaper suburban premises (b) Cut the news down to half an hour with one presenter (c) Follow the news with Ryan Bridge’s new show, so you are still competing against TVNZ. Bridge, if he is good enough, can make his tightly staffed show profitable if he secures a major sponsorship (d) Disestablish the two foreign correspondent roles and use reports from Warner-owned CNN. Get all of the higher-paid news staff to take a pay cut. Actually, get everyone in the company to take some sort of cut (e)Ask the government to forgo the transmission fees that Kordia charges.

Together these changes will save many millions.

Then go to every big advertising agency and every big company in New Zealand and ask them to give Newshub a bigger share of advertising – at least until the economic climate improves.

Not all will agree but some definitely will – they would not want TVNZ news to have a monopoly on a key group of viewers and, potentially, lift rates.

If Warner wants more, let their executives sit on beer crates when they come to town.

Mark Jennings is the Co-Founder and Co-Editor of Newsroom based in Auckland. The above article, which appeared on the Newsroom website, has been reproduced under a Special Agreement.