Sky TV boss stresses it’s ‘business as usual’ after buying TV3 owner for $1

Tuesday, 22 July 2025

It will be “business as usual” for Sky Television and television channel Three owner Discovery NZ, after Sky agreed to buy Discovery NZ for a dollar, the pay TV firm’s chief executive Sophie Moloney says.

Discovery NZ has posted a string of losses in recent years, culminating in a $138 million loss, after write-downs, in the 2023 calendar year.

Although the deal is being regarded as one of the biggest shake-ups in the media industry for years, Moloney played down the impact in terms of immediate changes viewers might see.

“It's business as usual for both businesses,” she said.

“There will be a process to go through as we work out how to bring the organisations together.”

But the intention was both businesses would “continue to operate as they are”, she told The Post, with no changes planned to any of their brands.

Addressing the question of how Sky would prevent red ink from Discovery NZ spilling onto its own books, Moloney said Sky was “incredibly disciplined” about its investments.

“There's certainly no gamble here,” she said.

The deal is expected to be completed on Friday week.

The Commerce Commission had been given a confidential heads-up and decided not to consider whether there might be a competition issue, Sky said.

Moloney confirmed Sky’s intention was to take on all of Discovery NZ’s staff, who are believed to number about 120.

It had no plans to merge Three with its own free-to-air channel, Sky Open, but there would be opportunities to give those channels more distinct identities, she said.

“With just the one free-to-air channel, we've had to ask Sky Open to do quite a lot and to try and meet different audiences. We now have the opportunity looking across all of the ‘linear’ channels to work out what's the best content for the audience that that channel serves”.

Stuff chief executive Sinead Boucher said the sale of Discovery’s business to Sky was “excellent news not only for TV3 — which is back in New Zealand ownership for the first time in decades — but for the media landscape as a whole”.

Stuff’s delivery of ThreeNews was “part of this deal” which opened up a lot of exciting new opportunities for Stuff, she said.

Sky investors responded positively to the announcement, sending Sky shares up 18 cents, or more than 6%, to a year-high of $3.10 in late morning trading on the NZX.

Sky TV will not receive the cash held by the business but will also not need to take on its debt under the terms of the deal, which effectively sees Discovery walk away from its New Zealand venture but without needing to pay the costs that would have been involved in it simply closing the business and laying off staff.

Moloney made clear that Sky had been particularly interested in Discovery NZ’s ThreeNow streaming service, which she said added “an important missing component to Sky’s portfolio” without it needing to invest in building and branding its own equivalent service.

There would be opportunities in future for Sky to deliver new content through that platform, but “the critical thing is continuity”, she reiterated.

“The content that's working on there now, we don't want to disrupt that at all.”

Moloney also played down what the deal could mean for its role in sport broadcasting and the strength of its hand during what are assumed to be fraught negotiations over the price it may pay for an extension of its rugby rights.

“I don't think it changes anything in the near term, but it does create that opportunity going forward to say ‘who are the audiences you're wanting to grow with?”, and looking across the ecosystem, where we best then work with that content.“

The agreement would give Sky about a 35% share of broadcast-television advertising revenues and about a 24% share of total digital television advertising revenues, the company told investors in a release to the NZX.

It expected the takeover to “deliver a pathway” to be cash-flow positive from the current financial year and result in sustainable operating profits of at least $10 million a year from the 2028 financial year, it said.

Sky expects to spend $6.5m merging the businesses but said it remained confident of delivering a 30 cent per-share annual dividend in the financial year just started.

The deal marks the second time a major New Zealand media business has been given away for $1, after Stuff owner Sinead Boucher was effectively gifted Stuff by Australia’s Nine Entertainment in 2020.

“Who doesn’t love a $1 deal,” Boucher said.

Commenting on Discovery NZ’s sale price, Media and Communications Minister Paul Goldsmith said the challenges of the sector were well known to everybody.

“But I think there's a good opportunity now,” he said. “I think what we're seeing is the sector responding, working its way through.”

The decision on whether to investigate takeovers lay with the Commerce Commission, Goldsmith said.

“It's important that we have a multiplicity of voices in the media, but I think you've got to look at it in the broader context of all of the different merging sorts of ways that people get their information.”

Warner Bros Discovery’s managing director for Australia and New Zealand, Michael Brooks, said the agreement was a “fantastic outcome” for its own business and Sky.

“The continued challenges faced by the New Zealand media industry are well documented,” he said.

“While this business is not commercially viable as a standalone asset in Warner Bros Discovery’s New Zealand portfolio, we see the value Three and ThreeNow can bring to Sky’s existing offering of complementary assets,” Brooks said.