WBD sells Kiwi linear and pay TV networks to Sky New Zealand for NZ$1
Publicly listed New Zealand broadcaster Sky New Zealand is to acquire the New Zealand operations of Warner Bros Discovery (WBD) the operator of platforms Three, ThreeNow, eden, Rush, and HGTV.
The surprise acquisition will see Sky acquiring 100% of shares in Discovery NZ for NZ$1 (US0.59c) on a cash-free, debt-free basis.
In terms of content, the deal does include a multi-year commercial agreement for the continued supply of WBD’s premium content to its former channels.Based on merged revenue and assets, Sky NZ will now emerge as the dominant New Zealand media company.
Under the deal WBD will retain ownership of its remaining assets in the New Zealand market, which includes global streaming service HBO Max and Warner Bros International Television Production (WBITVP) New Zealand.
Both companies are working on a structured transition plan that will see the Discovery NZ team join Sky in the coming months.
Sky chief executive, Sophie Moloney, said the consolidation was a “future-focused step” for Sky.
“It positions us to scale faster, puts real momentum into our strategy, and grows and further diversifies our revenue streams, particularly in advertising and digital,” she added
Moloney said Sky recognised the work and investment undertaken by Discovery NZ in the past 12 months to cut costs and create a more digital-focused business.
“We are confident Sky is uniquely placed to take the business forward. We see strong value in ThreeNow’s high quality broadcast video on demand platform, and Three’s mass reach, and we are looking forward to creating opportunities to do more with our content, for more New Zealanders, in more ways that work for them across a comprehensive portfolio of subscription and free-to-access platforms,” she said.
The companies have yet to detail resourcing implications or impact on staffing or operations and a consequence of the acquisition other than confirming Discovery NZ’s head of networks VP Juliet Peterson, would continue to lead the business, reporting to Moloney. Sky stated it had no immediate plans to change current programming on any of the acquired Discovery NZ platforms.
WBD managing director ANZ, Michael Brooks, was upbeat about the divestment, noted the continuing operating challenges being faced by the New Zealand media industry and conceded that Discovery NZ as a standalone model was no longer commercially viable despite a realignment last year.
Brooks said: “The Discovery NZ team has worked to deliver a new, more sustainable business model following a significant restructure in 2024. While this business is not commercially viable as a standalone asset in the WBD New Zealand portfolio, we see the value Three and ThreeNow can bring to Sky’s existing offering of complementary assets. The transaction includes a significant and ongoing content supply agreement for WBD’s premium content, for the mutual benefit of both parties.”.
Moloney added that despite Discovery NZ’s financial issues, the transaction structure allows a pathway to achieving positive underlying free cash flow from year one.
“Notwithstanding the ongoing challenges faced by the Discovery NZ business, Sky is uniquely placed to give effect to this opportunity to accelerate our growth strategy. On completion, Discovery NZ’s balance sheet will be clear of certain long-term obligations, including property leases and content commitments, and will include assets such as the ThreeNow platform, a portfolio of content rights acquired in the normal course of business and clear of content payables, and a normal level of other net working capital.”
Regulatory and compliance completion of the sale is expected to take place on August 1, 2025. The NZ Commerce Commission has already greenlit the acquisition as both parties advised that they had given the Commission confidential advance notice of the transaction.
