From US$20m to $1 in five years: The Three-Sky deal explained
Tuesday, 22 July 2025
Five years ago, Discovery bought TV3 for a rumoured US$20m. Today it’s selling it for just NZ$1. What happened? Why is yet another media company being sold for a pittance? And what does this mean for the content Kiwis consume on both Sky and Three? Explainer Editor Lloyd Burr takes a look.
There are many metaphors that can describe TV3, or Three as it’s known now.
It’s the Energiser bunny that just keeps going on and on and on and on.
It’s the movie character that just won’t die, no matter what trauma’s lumped on it.
It’s the underdog team that never gives up. (Or the problem child whose numerous parents and caregivers never give up on.)
The channel has been through the ringer numerous times and, for some reason, it endures. The latest chapter is Sky NZ buying it for $1, just five years after Discovery purchased it for a rumoured US$20 million.
Here’s a quick look back at its history, its owners, and what various players in the game think of Three’s new owner.
Quick history lesson
In 1985, the fourth Labour government opened up the media landscape to allow a third TV station to compete with the state-owned channels, one and two.
There were a handful of different groups which bid for the rights to start it, eventually being awarded to a group called TV3 (TeleVid 3), mostly NZ-owned but with a 15% stake owned by NBC in America.
But just six months in, TV3 went into receivership. NBC sold its shares and Westpac ended up owning half the company (and kept it operating). It prompted foreign ownership restrictions to be changed by the government, which saw Canadian broadcaster Canwest buy a 20% stake.
It trucked along in the 90s and became a profitable operation.
The year 1997 was big. TV4 was launched, and Canwest increased its ownership stake to 68% and then to 100%. A few years later, it purchased RadioWorks, a company that had acquired a raft of radio station brands like Radio Pacific, Radio Otago, The Edge, The Rock, and Radio Windy (later The Breeze).
In 2004, Canwest’s TV and radio businesses were brought together under the name MediaWorks, and three years later - just before the Global Financial Crisis (GFC) - CanWest sold it to US-based private equity company Ironbridge Capital. It was valued then at more than $700m.
The GFC hit the company hard and in 2013, loaded with debt, MediaWorks went into receivership (again). It ended up being bought out by a US hedge fund called Oaktree Capital.
By 2019, with free-to-air television struggling, MediaWorks put the TV arm of the business up for sale and the following year, it was purchased by US-based Discovery TV for an estimated US$20m.
In 2022, Discovery merged with fellow US media company Warner Brothers to create Warner Bros. Discovery (WBD).
In 2024, the company shut down the news arm of Three, called Newshub (including numerous bulletins, the morning show AM, political show Newshub Nation, and the website). It subsequently outsourced the 6pm news bulletin to Stuff, which remains to this day.
Why did WBD sell?
A mixture of advertisers spending less, changing consumption habits, and WBD reflecting on why it’s in the free-to-air part of the New Zealand market.
“As standalone assets, it’s a challenging market,” says Michael Brooks, WBD’s Australia and NZ managing director. “Advertiser behaviour has shifted, viewer habits have shifted, and we’re still going through this digital transition.
“The media industry has changed right across the board. I don’t think there’s a market or a company that hasn’t been impacted over the last few years,” he says.
Globally, there are huge changes happening within WBD. It’s being restructured into two arms - one focusing on streaming, the other on global networks. Is the sale of Three because of this?
“There’s absolutely no connection between those two things,” Brooks says. “This has been in the pipeline for months, whereas the WBD changes were only announced in June.”
Has the company been wanting to withdraw entirely from NZ?
“Not at all,” he says. “Obviously we went through the restructure not long ago based on the market conditions here and that team has done incredibly well.
“People have grown up with this brand over the last 35 years and we’ve been able to create a future for it with Sky,” Brooks adds.
Has WBD’s time in NZ been a disaster?
It’s a valid question given the media giant paid an estimated US$20m for it in 2020. But Brooks rejects that.
“Not at all. The network business is just one part of the business. The films that we’ve been shooting here have been highly successful, we’ve got an independent international production business that’s here, and our HBO Max deal here.
“Has it been challenging? Yes, there’s obviously been challenges, but I don’t think anyone could have foreseen the shift in the marketplace back when this was bought in 2020.”
Why did Sky buy?
Sky’s chief executive Sophie Moloney says it makes sense, both strategically and financially.
“We’ve made no secret of the fact we want to grow our advertising revenue and the one platform we’re actually missing in that ecosystem was a BVOD [broadcast video on demand] platform.
“Ultimately, we think this shores up the local media ecosystem which we’re thrilled to participate in.”
Moloney says the deal has been months in the making. “It’s a significant process, it’s hugely complex. We finalised overnight and being a listed company, we had to go out to the market.”
Will anything change?
Not straight away.
“For now, no change to the content we’re delivering to all of the audiences,” says Moloney. “There’s a lot to still work through over the coming months.
“We already do a lot of free-to-air sport on Sky Open [formerly Prime] but of course this creates an opportunity for us to see where the best place is for us to be putting free-to-air sport to maximise that investment.
“So yes, there will eventually be changes including possible rebranding of channels.
“We have to work out who the audiences are, what’s the best way to deliver it, and really think about the channel identities,” Moloney says.
What about Three News?
Given WBD has an agreement with Stuff to produce the daily Three News bulletin, it’s fair to ask whether that will change.
Again, not in the short term. Moloney says Sky will honour all WBD’s existing contracts, including the news deal with Stuff.
“There will be a continuation of those agreements. We’re excited about Three News and what we can do with Stuff going forward.”
She wouldn’t say when the Stuff deal is set to end, or whether it would be extended at that stage - but Moloney did say two things that suggest where Sky’s thinking is at:
“It’s an opportunity to think about some great storytelling.”
“If there’s advertising funding that makes sense to sponsor programmes or have a look at different opinion shows, of course we’ll explore that.”
Why the $1 price tag?
There have been a couple of companies which have recently sold for $1.
One of them is the website you’re reading right now. Australia’s Nine Entertainment sold Stuff and its vast range of newspapers to Sinead Boucher in 2020 for $1.
The other is outdoor retailer Torpedo7. Its owner, The Warehouse Group, sold it for $1 to Tahua Partners in 2024.
Also worthy of a mention is Bauer Media which tried to sell its entire New Zealand magazine operation (Woman’s Day, The Listener, Metro among others) to the government for $1 too.
So why $1? Is it just a token offer like when you must give someone a coin if they gift you a knife? Kind of.
“There has to be a financial exchange,” says Mark Lewis, director of NZ Business Brokers. “Even when someone is buying the company for nothing.”
Reasons for $1 sales vary but it’s typically because the parent company just wants out.
“The company’s not trading to the levels the owners are comfortable with and it’s probably not working for them,” Lewis says.
“To make it attractive, they’ll sell it at a nominal amount.”
Do they have to hand over a $1 coin or make a $1 bank transfer?
“No, we don’t,” Moloney says. “It’s written into the agreement so that’s all just part of the transaction.”
What’s the government saying?
Prime Minister Christopher Luxon has very little to say.
“Yeah, I saw those reports,” he said at Parliament. “Obviously it’s a commercial decision and up to the parties to make that decision. Got nothing to do with me.”
But Media and Communications Minister Paul Goldsmith was much more upbeat about the deal.
“It’s encouraging that we’re seeing investment in New Zealand media, so that’s good,” he says.
When asked if the $1 price was good, he responded: “Well, not the fact that it’s a dollar but the fact we’re having investment in TV3 and we have a good, sound Sky so I think it’s quite exciting.”
Is he worried New Zealand’s second-biggest broadcaster is worth $1?
“Look, ultimately, the challenges of the sector are well known to everybody, they’ve struggled to effectively make it work but I think there’s a good opportunity now.
“Ultimately, a benefit would be a strong and sustainable TV3,” says Goldsmith.
Duncan Grieve: ‘A big shock but the best outcome’
Media commentator Duncan Grieve believes it’s “unequivocally good news” for both Three and new owner Sky.
“Three has had a really unfortunate ownership history, either because they’ve held the debt or been reluctant owners. So to have it part of a pure New Zealand media company is one of the best outcomes they could have hoped for.
“Sky gets a new advertising-funded platform to reach the big audiences that have been with Three for decades. Three gets a whole lot more confidence that its owner wants to be there with it.
“It was a big shock initially because this is one of the biggest TV companies in New Zealand swallowing one of the other biggest TV companies in New Zealand. But given what’s happening with Three’s parent company, it wasn’t exactly a surprise either,” he says.
However, Grieve says a $1 sale for the second time in the industry feels “like a verdict on the health of the media” in New Zealand.