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Discovery makes NZ free-to-air ‘bet’ with takeover of Three

US-based media company Discovery has agreed a deal to acquire the free-to-air television business of MediaWorks, which claims to be New Zealand’s largest independent commercial broadcaster.

The deal, which is expected to close by the end of the year, represents Discovery’s most significant free-to-air investment in the New Zealand market to date, and includes entertainment channels Three and Bravo, streaming service ThreeNow, and multi-platform news and current affairs service Newshub. The takeover also includes Three+1, Bravo+1, The Edge TV and The Breeze TV.

The sale price has not been divulged.

MediaWorks put its unprofitable television division up for sale 11 months ago, with Discovery now set to become the biggest privately-owned player in the New Zealand free-to-air industry. Discovery currently operates a portfolio of six pay-television channels in the country, including Discovery Channel, TLC, Animal Planet, Food Network, Living and Discovery Turbo, and two free-to-air channels – HGTV and Choice TV.

Discovery, which owns pan-European sports broadcaster Eurosport, has had a presence in New Zealand since 1994, when it first launched Discovery Channel via pay-television broadcaster Sky New Zealand.

TV3 does not currently hold any top-tier sports rights but did acquire rights to the 2007 and 2011 editions of the Rugby World Cup. TV3 picked up rights to the 2011 tournament, which was held in New Zealand, as part of a free-to-air consortium also including TVNZ and Maori TV.

TV3 also vied with TVNZ for the rights to the 2021 America’s Cup, losing out in the bidding to the public-service broadcaster.

In 2016, Discovery bought a minority stake in the Auckland-based RugbyPass. Sky acquired a 100-per-cent stake in the OTT streaming service last year in a $40m (€33.8m/NZ$59.7m) deal.

Simon Robinson, Discovery president for the APAC region, said: “With a 26-year heritage in the New Zealand market, we are committed to drive MediaWorks TV’s future growth and success, delivering increased value to audiences and advertisers across all screens in New Zealand.”

Robinson added: “This is us making a bet on New Zealand. We are cognisant of the challenges and the headwinds, but we think New Zealand is a great market and relatively stable.

“We wouldn’t invest in something that we thought was loss-making long term.”

Jack Matthews, MediaWorks’ chairman, remarked: “MediaWorks has made great strides over the past several years and I believe Discovery is the ideal new owner to continue that momentum across the TV business.

“The sale will enable MediaWorks to have a greater strategic focus on the long-term future growth of its highly successful and market leading radio and out-of-home business, offering effective advertising solutions to our customers and great news and entertainment to our audiences.”

(additional reporting by Martin Ross)