The Weekend Herald reports the power play prompted by a billionaire investor. Photo: Weekend Herald / NZME
Mediawatch - At a farewell do this week for some of the NZME staffers made redundant in the company's recent restructure, one journalist leaned on the bar and delivered a bleak quip.
"This was meant to be a wake for the people leaving, but it's turned into a wake for the people who are staying," he said.
Staff are nervous about the billionaire James Grenon's push for more control at the media company which owns the New Zealand Herald, five North Island daily papers and about half the country's radio stations including Newstalk ZB.
The Canadian private equity tycoon - a New Zealand resident since 2012 - bought a 9.3 percent stake in NZME last week for just over $9m.
Within days, he had written to the company's board proposing that most of its current directors be replaced with new ones, including himself.
NZME told the NZX Grenon claimed to have the backing of 37 percent of NZME shareholders for the leadership overhaul.
The statement said Grenon had "no current plans" for a takeover, but some NZME staffers and commentators believed that was his endgame.
"Since then, now that it is public, I have been approached by investors who I understand represent far more than another 10 percent - and they are expressing support," Grenon told The Post on Friday.
Grenon's previous criticisms of mainstream news media have prompted fears that new ownership with him on the board would also mean a hands-on approach with the editorial output.
Before Grenon made his NZME moves, The Australian newspaper reported last month that "wealthy Kiwis" might be plotting to take over NZME and "a Canadian billionaire who resides in New Zealand is eager to get involved."
The article said "the chatter" was based on its "poor performance," and "complaints from the business community over the quality of the publisher's content."
Grenon was involved in founding alternative online news website The Centrist in 2023. It named The Herald and BusinessDesk (now NZME-owned) as reasons for launching The Centrist.
After BusinessDesk identified Grenon as a backer, The Centrist said the Herald "lacks balance (on issues) including co-governance, climate science and the COVID response."
Most Centrist content is anonymous and the identities of the site's editors and publishers are not declared. But the site is bulked up with summarised news stories and links from mainstream news outlets, including the Herald.
An earlier venture, New Zealand News Essentials - NZNE - prompted NZME to take legal action over the name. NZNE has since been folded into the Centrist.
Grenon also backed anti-vax influencer Chantelle Baker in her defamation action against NZME which was settled out of court.
Grenon registered as a promoter ahead of the 2023 general election.
"I am only willing to providing [sic] information on this as legally required, which I have done," Grenon told RNZ at the time.
"The Herald is privately-owned and always has been - and the ownership shifts around a bit," said Bryce Edwards, who leads the new Integrity Institute which intends to be a watchdog on media as business and politics in New Zealand.
"Grenon has a critical stance towards the current media landscape. But because we have some huge problems in the media with public trust declining, and a sense of the media stuck in a bubble to some extent, maybe it's good to have some outsiders coming in, mixing things up a bit," he said.
"But if owners who have a very activist orientation are coming on board and if they want to push the media in a particular way as we've seen with Jeff Bezos, that is alarming for democracy," Edwards told Mediawatch.
Editorial firewall
News publishers like NZME have traditionally upheld a firewall between corporate management and news, and reporters are now worried Grenon could seek to use his influence to dictate coverage on issues - such as the ones that preoccupy The Centrist.
"Our top priority is preserving the impartiality of our journalism and the independence of the newsroom," said NZME's delegate to the main journalists' union E tū Isaac Davison.
"While the intentions of the potential new board members remain unclear, we are concerned about an apparent record of backing news ventures which lack transparency," said Davison in a statement on Friday.
E tū union's negotiation specialist Michael Wood told RNZ Grenon was one of a number of billionaires leveraging their wealth to amplify their worldviews.
In the US the Washington Post's billionaire owner Jeff Bezos recently declared the paper's opinion section would focus on promoting "free markets" and "personal liberties".
Elon Musk has used his company X, formerly Twitter, to amplify his views as well as censor dissenters.
"We see a pattern that has been incredibly unhealthy in other countries," Wood said, of billionaires "moving into media ownership roles to be able to promote their own particular view of the world."
Grenon has not spoken directly about his editorial intentions.
But in response to Labour's media spokesperson Willie Jackson warning about "billionaires buying up media companies to promote their own warped and distorted views," Grenon told Stuff: "I think Willie is a fool for talking about things he knows nothing about."
Mediawatch understands NZME journalists are already discussing which kind of editorial interventions would compromise their editorial independence and impartiality.
Some cited the Fox News network in the US and told Mediawatch they simply would not work for NZME if it came to resemble that.
NZME journalists have told Mediawatch any attempts to direct editorial resources to issues of interest to new owners - or the preoccupations of The Centrist - would imperil NZME's success in digital subscriptions.
NZME currently has about 150,000 subscribers paying for news and a target of 190,000 by 2026.
NZME's response - and its own editorial rejig
Mediawatch asked NZME what protections are in place to ensure editorial independence in light of Grenon's increased influence at the company.
It said it had no comment to make regarding Grenon's plans beyond its recent statements to the NZX.
But editorial change is coming anyhow.
When NZME revealed its latest annual results to investors recently, it also told them it would set "a new tone" to "help New Zealand thrive".
"NZME will also focus on taking a leadership position to help New Zealand thrive, using its various platforms - including the New Zealand Herald - to support the reboot and acceleration of New Zealand's economic recovery - and sharing stories of success and building positive momentum."
Some saw it as the company swinging in behind the government and priorities laid out by the Prime Minister earlier this year
"The board and management's declaration that its leading asset, the Herald, would adopt this path is a knowing nod to the business community that NZME sniffs change in the political and financial winds," former Herald editor Murphy concluded on Newsroom.co.nz.
NZME editor-in-chief Murray Kirkness told Mediawatch that wasn't the case.
"The campaign is non-partisan and will see us using our platforms to help New Zealand thrive, build positivity and support the reboot of New Zealand's economic recovery," he said in a statement.
He compared the campaign to previous Herald advocacy journalism, including the 90 percent Project, which aimed to get nine out of 10 New Zealanders vaccinated during the Covid-19 pandemic.
"It's hard to read exactly what it means, but the way I interpret it is that they're going to be more positive about business and champion the private sector more," director of the Integrity Institute Bryce Edwards said, who was a regular Herald contributor and columnist until recently.
"There's a lot of Herald journalists that have spectacularly scrutinised the powerful. And that still happens today. But media have always had audiences that aren't just the readership - the advertisers, the owners, the friends in high places of the newsroom."
"There's great journalists there, but I'm a bit worried about where the Herald's going. It would be good to get some answers from them on that," Edwards told Mediawatch.
AI-driven homepage?
NZME's briefing to investors along with its recent annual results also flagged plans to use AI to curate the Herald's homepage.
The paper was found to be using artificial intelligence to write some editorials last year, and its journalists currently use AI tools to check things like sentence structure, grammar and create shorter versions of articles.
But using it to edit the site's homepage would be a significant step, and some journalists thought it would take the site closer to the algorithm-based systems used in social media.
Though the exact role AI will play is still unclear, it's believed it could tailor the homepage to users based on their revealed preferences. For instance, a sports fan would get served more sports content - and other news in their location.
But Kirkness said editors would retain control.
"There is always human oversight across all content and sections of the homepage are always curated by editors. We constantly review our automation tools based on newsroom expertise and evaluation and the tools continue to evolve to ensure we're offering the best user experience," Kirkness told Mediawatch.
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