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DomPost returns to local ownership, sold by Australian owners

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There’s a new owner for the DominionPost – a management buyout of its parent company Stuff Ltd has been successfully completed by the Stuff chief executive Sinead Boucher. The DomPost reports the deal this morning:

The DomPost report by Luke Malpass says:

The management buyout led by Boucher is understood to have been planned and executed very quickly, with the chief executive buying the company from its Australian owners Nine Entertainment for a direct price of $1, and returning the company to New Zealand ownership. The sale is expected to be completed by May 31.

Direct proceeds from the sale will be NZ$1. Nine, however, will retain ownership of Stuff’s Petone printing plant site and lease it back to Stuff. It will also receive an immediate and ongoing percentage of the proceeds from the sale of Stuff Fibre to Vocus, announced on May 14.

“As a result of the successful completion of the Stuff Fibre sale on 20 May 2020, Nine will receive 25 per cent of those proceeds before completion of the Stuff sale, plus up to a further 75 per cent over the subsequent 36 months, depending on the Stuff business’ ability to raise funding,” Nine said in a statement to the Australian stock exchange.

“We have always said that we believe it is important for Stuff to have local ownership and it is our firm view that this is the best outcome for competition and consumers in New Zealand,” said Hugh Marks, CEO of Nine.

“It is great to take control of our own future with the move to local ownership and the opportunity to build further on the trust of New Zealanders, who turn to us for local and national news and entertainment every day,” said Sinead Boucher.

“We are looking forward to working closely with staff, customers and our audiences as we embark upon what we believe will be a great new era for the business and the independent journalism it is built on.”

RNZ quotes her as saying:

“Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders. Local ownership will bring many benefits to our staff, our customers and indeed to all Kiwis, as we take advantage of opportunities to invest in and grow the business.”

Report from RNZ Checkpoint
Stuff’s chief executive Sinead Boucher, who has bought the media company for $1 from Australia’s Nine Entertainment, says she has no other financial backers at this stage. She told Checkpoint she will look to give staff a stake in the business through shares.

Boucher says she has taken on the Stuff company with a mix of trepidation and excitement – but with no signed investors.

“I have until the end of the week to hand over the money, and I really am hoping that I get to front up with my cash,” she told RNZ’s Checkpoint

“I’m feeling really overwhelmed today by all the positive reaction I’ve had from staff, readers and customers, but it’s definitely a big undertaking, and certainly not one that I planned out for my career when I started off at Aoraki School of Journalism in Timaru.

“I think it’s great to be able to bring the business into New Zealand ownership, and I look forward to a future where staff can have a direct stake in that and we can be more masters of our own destiny.”

Boucher says she has no other financial backers.

“It is just me, and being able to do that with Nine, just working over the last couple of weeks to secure that transfer of ownership … the next step now is to sit down and work out how to introduce a model that allows some staff direct ownership and also leaves open the ability for us to potentially bring in other investors or partners down the track.

Boucher said there were other businesses and people she would like to see Stuff working with.

“Now that we’re on our own and not part of a bigger company it does definitely give us a lot of freedom to start to think about the kind of business we want to build out and who else maybe we might want to work with to be able to achieve that.

“We haven’t taken on any debt. But obviously have taken on the responsibility for the company, and with that comes the livelihoods for all the people who work here, so that wasn’t something that I took on lightly.

“But Stuff has always been, even though it’s been owned by an international parent in one way or another, it’s always been self-funding and self-managing as a business.

“We were in a good position before we hit the Covid crisis. During those weeks of lockdown the business was really severely impacted as advertising fell away… we were able to manage our way through that with the help of the wage subsidy, with good cost management and staff taking a voluntary pay.”

Boucher told Checkpoint the purchase was made on the understanding that the company would be able to “stand on our own two feet into the foreseeable”.

“The first thing I need to do is sit down with my executive team, who only heard about this this morning also.

“We were obviously already working on our initiatives and plans for the next financial year. And now we need to consider those in light of the change of ownership, whether they are still opportunities we want to pursue or whether we do things differently.”

Stuff recently adopted a donation model, where a pop-up on the website asks readers to make a financial contribution. Boucher said it had helped, and was a model that had proven successful over the long-term for news websites like The Guardian.

“Yes we absolutely need to do things differently, as do the rest of the media industry as well. We know traditional media business models have been disrupted and challenged over the last few years, and a change of ownership is just not the magic solution to fixing all of that.

“During the Covid crisis we launched the Stuff supporters programme, which we had been working on for a few months… where we ask readers to contribute financially to support the journalism they value. It’s just another way of approaching something versus putting up a hard paywall or whatever else.”

Stuff management had looked at a paywall in the past, and it could be a future possibility, Boucher said.

“The rest of the media industry – there’s an understanding that you need to rely more on direct funding from readers versus advertisers, to continue to flourish.

“So we definitely wouldn’t rule it out in the future, but at this stage, we have been really pleased with the kind of reaction that people had in the contributions model.”

Boucher said, at this stage, the money that had been coming in through contributions each day was comparable to what the company would get if it had launched a paywall. “But saying that, it’s really early on, and we’ll just have to wait and see how that goes, and whether that’s something that’s sustainable.”

She said she had no plans that anyone at Stuff will lose their jobs at the moment, but acknowledged the company was under a lot of duress and has to go through a period of transformation.

“I was very supportive of the NZME merger process, because I could see the need to do something that was going to help put New Zealand journalism on a stronger foundation. When it became clear that was not going to progress, I started to discuss the option as an MBO [management buyout] with Nine.

“It’s not comparing apples with apples, and one of them as a major that might allow some consolidation of back office costs and things like that, and the other is a chance for a business and staff to take control of their own future, and bring that energy and ideas in there, and see what we can achieve.”

All of Stuff’s newspapers were profitable going into the Covid-19 lockdown, and there was an increase in subscriptions as well as record digital audiences, Boucher said.

“People’s habits are changing, advertising habits are changing. Down the track at some point in the future I can’t say that we will have all of our newspaper titles.”

But she said the company “absolutely” had the money to pay the next round of wages, “and the rounds after that too”.

3 comments:

  1. Paula Penfold, 25. May 2020, 11:29

    I can’t tell you what an incredible feeling it is to work for people and a company which puts staff and journalism first. We’re in good hands. [via twitter]

     
  2. Tim Murphy, 25. May 2020, 11:58

    Stuff’s saviour Sinead Boucher becomes the NZ and media version of the management legend Remington’s Victor Kiam (“I liked it so much, I bought the company”) Bravo. [via twitter]

     
  3. Sinead Boucher, 25. May 2020, 21:46

    Thanks for all the gorgeous messages from everyone today. I was quite nervous about announcing the change of ownership for nzstuff this morning, so it has been lovely to receive so much support. Onwards! [via twitter]