‘Kiwishare’ plan urged

High-level talks are under way over Government backing for a new bid from NZME to buy media rival Stuff Ltd, it is understood.

The Government has been lobbied by NZME over whether it can find a way to further its chances, Government sources have confirmed.

One of the country’s biggest media organisations, NZME owns The New Zealand Herald and Newstalk ZB.

The talks are understood to include proposals for a ‘‘Kiwishare’’ arrangement, similar to that last used by the Crown to protect free local calls and fixed phone line rentals when Telecom was privatised in 1990.

Effectively, the arrangement could ringfence Stuff’s editorial operations and protect local journalism.

That would answer concerns raised by the Commerce Commission in 2017 when it rejected a merger proposal on the grounds of a loss of a plurality of voices in New Zealand journalism.

The Kiwishare arrangement would potentially overcome that hurdle but it is one of several options being considered, including bypassing the commission or doing nothing.

During the commission hearings, Stuff’s owner at the time, Australian company Fairfax Media, warned that there would be significant job losses and further media disruption if the merger proposal failed.

It cited shrinking revenues in the face of massive competition from the likes of Facebook and Google, which suck up most of the digital advertising dollar but don’t fund any local journalism themselves.

The latest bid would require some form of regulatory approval.

Stuff’s new owner, Nine, declined to comment. It unsuccessfully tried to sell Stuff earlier this year.

In a statement to the New Zealand stock exchange, NZME confirmed it was in discussions with Nine and had put a proposal to the Government about a possible transaction.

‘‘However, NZME notes that these discussions are preliminary and stresses that no decision has been made in relation to any potential transaction. There can be no certainty at this stage that these discussions will result in any transaction,’’ the statement said.

Another option being considered is that the Government could issue some sort of directive to the Commerce Commission that could make it view another bid more favourably. Or it could override the commission’s decision through legislation.

Stuff understands that the Government isn’t keen on the precedent either of these options would create.

A third option is to do nothing.

Given the major issues involved that could be the Government’s preferred option.

Broadcasting Minister Kris Faafoi could neither confirm nor deny whether the Government was mulling a ‘‘Kiwishare’’ model to allow NZME to buy Stuff.

He said the Commerce Commission decision blocking the move was still in place and ‘‘anyone who has had a good look at the Commerce Commission’s ruling would find it pretty hard to change their minds’’.

Faafoi confirmed he had spoken to media companies about their concerns and briefed Cabinet about the situation, but refused to get into specifics.

‘‘I have spoken to nearly every media company in the last 12 months because they are all worried about survival in the future.’’

He would not discuss commercially sensitive details, and neither would he rule out the Government somehow overruling the commission’s decision.