Trade Me to buy 50% of Stuff Digital

Online marketplace Trade Me is taking a major stake in the digital operations of media company Stuff

In a statement, the companies say Trade Me will take a 50 percent stake in Stuff Digital - which publishes the website stuff.co.nz and ThreeNews.

Stuff's mastheads - The Post, the Press and the Waikato Times - it's events business and Neighbourly are not included in the deal.

Last year the media company was divided in two - Stuff Digital and Masthead Publishing which runs newspaper brands and their own websites.

Boucher bought Stuff from its Australian owners Nine Entertainment for $1 in 2020. In February this year, she changed her holdings in Stuff Digital from being the owner of the one and only share to being the sole holder of one million shares.

After Boucher bought Stuff for $1 in 2020, she told staff that a 10 percent stake of the company would be put into a staff trust in the event that the business was sold or listed.

A spokesperson said that, while there was still some time until the deal was to be completed, it was Boucher's expectation that a payment would be made into the staff trust.

Boucher said the deal with Trade Me provided "brilliant new opportunities together, and for Stuff Group, continued investment in technology and talent for the future."

"It was important to me that we found the right partner at the right time in our growth strategy, protecting our fiercely independent media business which isloved and trusted by millions of New Zealanders," she said in a statement.

Skoe said the advantages of the deal were clear from the outset, particularly for Trade Me Property customers. "This acquisition will enable vendors and agents to reach an even wider pool of prospective buyers while empowering buyers with every resource to navigate the property market with confidence.

Under the agreement, Stuff's property section will become Trade Me Property branded, with listings, ads and some content shared across both platforms.

Boucher said editorial independence and integrity was intrinsic to Stuff, and Trade Me was committed to upholding Stuff's editorial code of ethics and practice.

Boucher will chair the new Stuff Digital Ltd Board. Stuff retains operational control of the business through the chair's casting vote.

Skoe will have a seat and there will be equal representation from both organisations.

The value of the deal has not been disclosed.

'Pressure on NZME'

Newsroom co-founder and former NZ Herald editor Tim Murphy says the deal will put pressure on NZME on its big day - on Tuesday afternoon, its annual shareholders meeting is likely to see it take on Steven Joyce as chair and outspoken shareholder Jim Grenon as a director.

Murphy said the deal worked for both Stuff and Trade Me.

"It makes a lot of sense, particularly given the main opponent or competitor, NZME, is right now looking at its property vehicle OneRoof. If OneRoof was to get separated and get more equity into it, more capital to play with and expand as it thinks it needs to, that could really have a go at Trade Me's base."

He said Trade Me putting its property vehicle on to Stuff would make it harder for OneRoof to compete.

Stuff journalists could end up writing "a whole lot more stories about houses for sale", he said.

"I mean, you look at the NZ Herald site sometimes and it can be quite dominant, the level of housing, celebrity housing, real estate deals…it's a big quotient of the Herald's offering."

Murphy said it would work for Stuff too. The value of the deal is not known but he said Stuff would have been suffering in the economic downturn of recent years.

"Such a big player relying on digital advertising that has gone down and down and down, from what we see from the listed company NZME. It would have been the same on Stuff… the income, the revenue from the digital side will have been really stretched. As well as that they've bought into and agreed to do Three News… so that was a deal that cost a bit and it has probably cost them more as it's gone along.

"It's just required more spend and a bit more cost. I think if you're Sinead, the owner, you're sitting there thinking you know I need some sort of equity injection.

"I do think it works for Stuff and it probably puts pressure on NZME more than they would have hoped on their big day."

RNZ Mediawatch presenter Colin Peacock said Trade Me was hoping to capitalise on Stuff's news traffic.

"Effectively it gets more viewership, all that news traffic that goes to Stuff. Unlike its rival at the NZ Herald, the NZME company, which has a lot of its content locked up in premium, Stuff's website is mostly free," he told told Nine to Noon.

"It is the mastheads at Stuff which have paywalls. So all the big heavy free traffic which comes to Stuff.co.nz can now be twinned up to Trade Me and its property."

'Opposite strategies'

Duncan Greive, founder of The Spinoff and media commentator, said it was a brave move.

"Obviously with Trade Me's history with Stuff and what it paid to acquire it in the first place and then what it got when it sold it, and the fact that it's now being purchased back just feels almost on the nose in terms of the narrative of news as relative kind of business importance."

Stuff's former owner, Fairfax, bought Trade Me in 2006 for $750 million, and sold the last of its stake in 2012.

"I think both Trade Me and Stuff deserve a lot of credit for being brave enough to make this move... they're basically testing the thesis that you can turn the attention that news generates into something more valuable."

He said it was interesting timing ahead of NZME's annual meeting at which the process could be begun to separate OneRoof from NZME, and this decision was taking the opposite tack.

"There are good arguments for both these things but they're essentially opposite strategies."

He said Trade Me could end up with its own team writing property news for the Stuff site.

It would be interesting to see how the Trade Me and Stuff workplace cultures merged, he said.

"My general impression is that this is a bit of a masterstroke for Sinead and for Stuff, finding a buyer in this market, finding a buyer that looks like a strategic acquirer rather than someone just kind of getting it on the cheap or for parts."

He said if the idea behind the plan proved correct it could be transformative for the financials of the Stuff business.

"Stuff Digital and Stuff [masthead publishing] being separate companies has always kind of had that bit of a question mark over to me in the sense that a lot of what makes Stuff Digital work as a company is that it can kind of piggyback off the journalism that comes out of mastheads.

"Now again we don't have the precise dollars on that. They might well resist that characterisation but ... this looks like it could be something which makes the Stuff Digital side independently profitable in its own right in a way that would be hard to imagine without it."

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