Sky TV agrees to buy Three for $1
The move was announced to the NZX, and would see US television giant Warner Bros Discovery leave New Zealand's free-to-air television market.
Under the deal, Sky would take control of all TV3 brands, including Three, Bravo, Eden, Rush, HGTV, and the network's streaming platform, ThreeNow.
The sale was made on a cash-free, debt-free basis and was expected to be completed on August 1. The deal also included a multi-year commercial agreement for the continued supply of Warner Bros Discovery's premium content to Sky.
Warner Bros Discovery would retain ownership of its remaining assets in the New Zealand market, which included its pay TV channels, streaming service HBO Max, and Warner Bros. International Television Production (WBITVP) New Zealand.
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Sky had "no immediate plans" to change the content lineup on any of the Discovery NZ platforms related to the acquisition.
'This is an exciting, future-focused step for Sky and a win for our growth and ambition to be Aotearoa New Zealand's most engaging and essential media company," Sky chief executive Sophie Moloney said about the acquisition.
"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."
Sky expected the sale to:
Deliver Sky revenue diversification and uplift of c.$95m on an annualised basis, with 25%from digital sources
Add to Sky's existing audience a growing digital audience via ThreeNow
Grow Sky's combined total linear television advertising revenue share to 35% and total digital television advertising revenue share to 24%
Deliver material cost synergies primarily across Sky's content and broadcasting infrastructure
Deliver a pathway to achieve incremental, underlying free cash flow from FY26 and sustainable EBITDA growth of at least $10m from FY28.
Moloney said Sky was "uniquely placed" to "take the business forward and give effect to the opportunity to accelerate our growth strategy".
"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.'
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Michael Brooks, managing director Australia and New Zealand for Warner Bros Discovery, said the move was a "fantastic outcome" for both companies.
"The continued challenges faced by the New Zealand media industry are well documented, and over the past 12 months, the Discovery NZ team has worked to deliver a new, more sustainable business model following a significant restructure in 2024," he said.
"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."
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Chris Keall is an Auckland-based member of the Herald's business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
