Sky TV NZ has confirmed it will buy Discovery NZ, the owner of free-to-air channel Three and ThreeNow, for just $1.
Announced to the NZX at 8:30am NZST today, the deal will see Warner Bros Discovery exit New Zealand’s free-to-air TV market entirely.
The acquisition, which is expected to be finalised on 1st August, will see Sky take control of all TV3 brands including Three, Bravo, Eden, Rush, HGTV, and the network’s streaming platform, ThreeNow. The sale has been structured on a cash-free, debt-free basis and includes a multi-year commercial agreement ensuring Warner Bros Discovery will continue to supply its premium content to Sky.
Warner Bros Discovery will maintain ownership of its remaining New Zealand assets, including pay TV channels, streaming service HBO Max, and Warner Bros International Television Production New Zealand.
Sky chief executive Sophie Moloney described the acquisition as “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.”
“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,” Moloney added.
According to Sky, the acquisition is expected to deliver several key benefits, including revenue diversification and an uplift of approximately $95 million on an annualised basis, with 25% coming from digital sources. The deal will also add ThreeNow’s growing digital audience to Sky’s existing audience base and increase Sky’s combined total linear television advertising revenue share to 35%, while digital television advertising revenue share will grow to 24%.
Sky anticipates achieving material cost synergies across content and broxadcasting infrastructure, with a pathway to incremental, underlying free cash flow from FY26 and sustainable EBITDA growth of at least $10 million from FY28.
Moloney emphasised that 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,” she said.
Michael Brooks, managing director Australia and New Zealand for Warner Bros Discovery, described the move as a “fantastic outcome” for both companies, acknowledging the challenges faced by New Zealand’s media industry.
“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,” Brooks explained.
Media Minister Paul Goldsmith called the sale “quite exciting” for the sector and “encouraging” in terms of investment in New Zealand media. When questioned about the future of Three News, Goldsmith indicated that “nothing is changing in relation to that,” based on his briefing about the sale.
The nominal $1 price tag for TV3 highlights what Goldsmith described as the “challenges” currently facing New Zealand’s media industry.