Media Insider: NZME chair Barbara Chapman on billionaire Jim Grenon’s push for board cleanout - ‘It is a defining moment for NZME, its future and for NZ’; Grenon pushes back

However, billionaire Jim Grenon, who is leading the charge for a board cleanout, has responded: “The status quo always says that. I have no interest in adding a director or two and going down the same road with a small correction.”

In an interview with the NZ Herald, Chapman says NZME has performed well, pushing back at criticism from the company’s biggest shareholder, Spheria Asset Management, which said last week it was “deeply disappointed” by NZME’s financial performance over the past two years.

Spheria, which owns 19% of NZME, is backing the bid by Grenon for a board seat along with three of his other nominees, at the company’s annual shareholders‘ meeting next month.

Grenon, a private equity businessman with a 9.97% stake in NZME, has previously established smaller alternative media ventures NZ News Essentials and Centrist, and there are concerns in some quarters he might seek to influence the NZ Herald’s editorial positioning.

Grenon has previously indicated he wants to invest in the company’s editorial endeavours, improve the Herald’s journalism and increase readership “with an emphasis on factual accuracy, less selling of the writer’s opinion and appealing to a wider political spectrum”. He has also said the Herald is a lot different from the Centrist.

Chapman, speaking about Grenon’s proposal, said the NZME board had concerns about governance, editorial independence and board nominee suitability, although she would not elaborate on the latter.

“I won’t go into the nominees today. We’re still doing some assessment of who they are and what skills they bring.”

However, she believes NZME’s future could be undermined by a major change of directors and direction.

She said it was “time for the board to insert itself into the discussion”, particularly, she said, on the financial performance of the company, “because what’s in the public domain is wrong”.

She said other “stakeholders” should also challenge the criticism.

“This isn’t just something that NZME should insert itself into. There are a lot of stakeholders in this company and I think it’s not just a governance matter.

“It is a defining moment for NZME, its future and for New Zealand. We need to ensure - going forward - NZME’s independence, its stability and its ability to pursue growth.”

Grenon told the Herald in a statement on Sunday night: “The current board’s concerns are just their own personal opinions. The shareholders can obviously come to their own judgment on these issues, at the rate of one vote per share.”

Company performance

In February, NZME announced ebitda* of $54.2 million with a post-tax loss of $16m after a non-cash impairment of intangible assets and said it was considering separating its property brand OneRoof into an entirely new business.

There is optimism within the business for OneRoof and the future value it represents.

Spheria Asset Management, however, said last week the status quo could not be maintained.

“Operating npat [net profit after tax] has declined from over $23 million in CY22 to just $12 million in CY24 - a near 50% drop,” said Spheria Asset Management portfolio manager Matt Booker.

“If this trend continues, the company faces a genuine risk of becoming unviable in the near future, which would have serious consequences for both shareholders and employees. This trajectory is simply unsustainable.”

Chapman said the discussion around NZME’s financial performance wasn’t accurate.

“A few years ago when this board was formed, this was a struggling company with really high debt and it was on shaky grounds,” she said.

“What this board has done is stabilise that [with a] good capital management plan and good debt management and good management of dividends, of buybacks. We’ve put the company on to a stable footing.”

She said NZME had “outperformed all key Australasian media peers over the past five years for share price performance and total shareholder return”, providing figures showing publicly listed NZME had the highest percentage increases in the five years to March 2025 when compared with the overall NZX50, Seven West, ARN Media, Nine Entertainment, Southern Cross Media, Seek, REA, Domain, Car and Sky TV.

She also cited Jarden’s recent independent analysis which placed the company at “outperform”.

“Independently, people are saying that there’s really good potential and good foundations in this company - and to keep going.”

Asked why Spheria had taken a different view of the company, Chapman said, “You’ll have to ask them - we’re dealing with the facts”.

“I haven’t spoken to them, but other board members have been over to talk to them and they’ve just got this view that it hasn’t been great. But that’s at odds with what they’ve been saying in the past, so I’m not sure why.”

Three board members travelled to Sydney last week to speak to Spheria’s Booker.

It is understood the meeting was initially declined by Spheria but Chapman says it did go ahead.

“There was a misunderstanding around some things going on in the background with the company and with Spheria, and that’s why they were initially told we don’t want to see you. But when that got cleared up, they did have a meeting.

“It was really us understanding what it is on Spheria’s mind; how were they seeing the company; how were they engaging with Mr Grenon; and giving them some of the points around a different view of the performance of the company.”

Three days later, Spheria issued to Media Insider its statement, saying it was “deeply disappointed” by NZME’s financial performance.

Meeting with Jim Grenon

Chapman told Media Insider late on Friday afternoon that board members were preparing to meet Grenon. Under his proposal, only one of the existing directors - someone selected by the new board, if nominees are successful - would stay.

“He certainly seems open to having the conversation,” Chapman said on Friday.

On Sunday evening, a spokeswoman for NZME said a meeting had taken place but she could not comment on it.

In a statement, Grenon also confirmed the meeting: “It was agreed neither side would discuss other than to say it occurred.”

On Friday, Chapman said the meeting would be a chance to understand Grenon’s position: “... why he’s where he is, putting forward some points of view ourselves around what we think is good for this company, talking him through the plans that we’ve got for this company and talking him through the performance”.

Grenon said in his statement on Sunday evening his position had not changed.

In a recent notice to the NZX, NZME said Grenon had indicated he had support from around 47% of NZME shareholders.

Chapman said on Friday that she did not know where the latest numbers fell.

“There’s lots of questions now being asked and lots of points being raised by the likes of the Shareholders‘ Association. I think people need to challenge what’s been happening here and ask these questions. I imagine over the next wee while people will do that and form their own assessments.”

Grenon told the Herald in his statement on Sunday: “To reduce the stress on the business there are things the existing directors could do, like making the transition easy if it looks inevitable.

“Once they have confirmed the support I claim, if they can’t point to some sort of significant shareholder support for themselves, then it looks to me like they are using their inside advantage, and the company’s money, to defend their own jobs. This seems like a self-serving concern for the business.”

Chapman confirmed a 17-page letter Grenon had written to the board would be released as part of materials to shareholders ahead of the April 29 meeting.

“We haven’t seen a detailed plan from Mr Grenon, that’s not what’s in the 17-page letter. We don’t know his strategic plan. When we meet with him, that’s something we’ll be asking him because we really need as directors to understand whether his plan is in the best interests of NZME.”

NZME has so far declined to release the letter, which is understood to cover governance, financial, operational and editorial concerns and matters.

“I’m not going to go into it because we’ve got to honour the shareholder’s request and that’s to send it out with the notice of meeting as a supplementary paper, so we will do that,” said Chapman.

Grenon said in his statement on Sunday: “I am not restricting NZME from releasing the document. They are doing that on their own.”

Editorial independence

Chapman would not say how much of the letter delved into NZME’s editorial endeavour.

“For us and the board, editorial independence is critical for New Zealand. It’s critical for NZME,” said Chapman.

“This organisation has a broad range of readers and listeners. ZB works with a right bias, but the Herald is seen as the most politically neutral [news outlet] in the country.

“It’s got a two million-plus audience. For us, keeping that editorial independence so that we’re talking to all sides of the political spectrum is in the best interests of NZME.”

Across publishing, audio and OneRoof, she said, NZME reached nine out of 10 New Zealanders.

She said she was only hearing in the media the speculation that Grenon might change editorial direction, “so that’s a question we need to ask him when we meet him”.

She said any change in the Herald’s editorial positioning - “if that were to occur” - would place advertising revenue at risk.

“Advertisers are interested in reach and if we lose reach because we’re narrowing our audience, then we will lose advertising revenue.

“Editorial independence is critical for NZME because having a broad base of people reading our newspapers and listening to our news bulletins is what drives revenue. If we were to narrow that, then revenue would be lost and that’s not in the best interests of the company or shareholders.”

Grenon told the Herald in his statement on Sunday night: “I will address editorial independence more fully shortly. For now, I will just say it is a phrase that many like to quote without really looking into what it means. It does not mean journalists get to do whatever they want, without supervision.”

On the matter of controversy over the past six months about the Herald firstly publishing a Hobson’s Pledge advertisement on its front page, but then declining another iteration, Chapman said these were operational matters for the company.

It was not feedback she was receiving as part of this process, she said, “but that is feedback we’ve had in the past from a small group of people”.

Board nominees

Chapman said the diversity of skillsets on boards was strategically important. She cited existing board members with a range of skills, including Guy Horrocks with a tech and digital sales background; Sussan Turner, a former broadcasting and media executive; and Carol Campbell, with a financial and accounting background. Chapman is a former ASB chief executive while the fifth board member, David Gibson, has a financial and investment banking background.

Chapman said the board had not yet completed its assessment of the six new nominees: Grenon himself and his three nominees - lawyer and blogger Philip Crump, retail executive Simon West, and private equity businessman Des Gittings - as well as another shareholder, Osmium Partners’ two nominees: its chief investment officer John Lewis and president Adam Hoydysh.

“As we think about the new board - we haven’t finished our assessment of the potential candidates yet - I would be challenging people to make sure that the board of this company is diverse in its views. Diversity makes for a good company,” said Chapman.

Asked how confident she was about retaining her position come April 29, Chapman said that was not how she was approaching the issue.

“What we’re trying to do is keep this company in a position where it’s strong and it’s relevant and it’s thriving. We’ve got a plan to do that.

“If shareholders vote in a different direction, then it’s not something this board can control. What we can control is making sure that people understand the strategy that we have and how we think that’s going to benefit the company.”

She said the company would talk to shareholders in the coming weeks. “Having everybody well informed is the objective.”

Resignations?

Asked if any of the existing board members, including herself, were intending to resign, Chapman said: “We’ve not had that discussion.”

Asked if that might be one possible scenario, in a background deal with Grenon, she said: “That can be how it works, but equally, we’ve all got to assess how we work with a board and what our role on a board would be if it wasn’t a diverse board. We’re all still working our way through who these people are and what skills they bring.”

She said the board’s key objective was to “keep this company in a position where it’s strong, and it’s relevant and it’s thriving - and we’ve got a plan to do that”.

She said it was the board’s responsibility to assess the independence of potential candidates.

“Shareholders have the right to nominate candidates but the board’s role is to assess whether they are independent or not. We’re going through that process at the moment, which is quite complicated, as you can imagine.”

Grenon, she said, had already said he would not be an independent director. It would be hard to imagine, she said, that Osmium’s two nominees could be considered independent, given they worked for the company.

“Then you get to a situation where you’ve got to have a balance of independent versus non-independent [directors] on a board. That’s a requirement. We’re working through who is and who isn’t and what it might look like in its total shape.”

Shareholder engagement

Chapman said she and the board “strongly” objected to assertions she and other board members had not been engaging with shareholders, citing NZME’s investor days and Q&A sessions over several years (although the 2024 edition did not go ahead) as well as annual shareholders‘ meetings.

She estimated she had spoken to five shareholders directly herself over the past three months. She declined to name them.

Another of NZME’s shareholders, Troy Bowker, has been publicly critical of Chapman in this area.

“The largest shareholder is an Aussie fund who she has never spoken to,” Bowker wrote on social media. “No surprise they are wanting change. Not a phone call or email.”

Asked if she felt the board had done enough in this area, Chapman said: “That’s really up to others to say.”

But she said the door was always open and a request would never be refused. “We’ve always said if anybody has any questions, then keep talking to us. We are available.”

Spheria also took aim at the NZME board last week for having only a collective 273,000 shares, compared with Grenon’s more than 18.7 million shares*.

Chapman defended the board on this: “This is a professional board that’s highly engaged with this company, [we are] very passionate about it and we all have skin in the game as a shareholder.”

Asked how she was responding to the sometimes heated criticism of the company and herself personally, Chapman said she and the board were focused on the company.

“We’ve got a plan - it’s a good plan for the growth of this company and the future of this company. We think that plan will deliver to the shareholder value - that’s what we’re focused on.”

Grenon’s earlier comments

Jim Grenon said last week that “concern about operational aspects of NZME” was “driving this change”.

“The editorial content is very much a side issue but the quality of the journalism does impact everything else in the business and is also the board’s ultimate responsibility”

In an earlier statement, E tū union director Michael Wood said Grenon had a “clear agenda to use NZME for his own interests”.

“Mr Grenon clearly wants to use his financial clout to steer the editorial direction of one of New Zealand’s largest and most important media networks,” Wood said.

Grenon said no one from the union knew anything about him and it was “just speculating, based on very little information”.

“Wealthy people are not all alike and come from all spectrums, including moderate. I do not have a history of being either a public or political person but I am concerned about the quality of the media in NZ,” Grenon said in a statement.

“Note also that I will have just one vote on the board and I need the support of a lot of other shareholder votes to get on the board. I can also be voted out later.”

He said it was a “leap” to think someone knew what would happen at the Herald based on his earlier media ventures Centrist and NZ News Essentials.

“Centrist is a small publication with a specific mandate to make the NZ news concise and curated for those who don’t wish to take a lot of time to keep informed,” Grenon said in his statement.

“This included some information on the other side of stories that were not being told in the sheltered enclave that is NZ. It mostly aggregated articles, which was part of the inspiration for the name (ie your centre for news).

“That is not the mandate of the Herald.”

* CORRECTION: An earlier version of this article contained a typo - Jim Grenon holds more than 18.7 million NZME shares; the 8 was missing in the earlier version. We apologise for this error. The story has also been updated to state NZME’s EBITDA (earnings before income, tax, depreciation and amortisation) was $54.2 million for 2024, not its earnings.

Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.