NZME Signs Letter of Intent with Google and Updates Outlook

Friday 25th March 2022

NZME Limited (NZX: NZM , ASX: NZM) (“NZME”) announces that it has signed a letter of intent with Google setting out the key terms for the proposed supply by NZME of news content for Google’s News Showcase and for other news products and projects pursuant to final agreements.

NZME and Google will now enter into a period of negotiation of up to 90 days with a view to finalising agreements based on the key terms set out in the Google Letter of Intent. The final agreements are intended to be for a minimum term of five years.

NZME is currently in commercial discussions with Meta with regards to them supporting a number of digital transformation projects over the next year.

NZME’s outlook statement at the time of announcing its full year results on 23 February 2022 included an expectation that EBITDA for 2022 would be more than that of 2021, despite the loss of the GrabOne contribution from 2021. Based on the key terms of the Google Letter of Intent, if NZME and Google ultimately enter into the final agreements at the end of the period of negotiation, and having regard to the current trading performance and other anticipated commercial arrangements, NZME expects that EBITDA for 2022 financial year would be in the range of $67 – 72 million.

NZME Chief Executive Michael Boggs says today’s announcement further demonstrates NZME’s commitment to growing and evolving its digital platforms.

“We are pleased to have reached a point with Google where we can partner with them to further enable digital growth across NZME’s business, boosting digital revenue for NZME and increasing our audience reach.

“We look forward to reaching final agreement with Google that will see NZME’s news content supplied and shared through Google programmes, continuing to support the future of high quality, trusted journalism in Aotearoa,” he says.

Caroline Rainsford, Google New Zealand Country Director says Google is proud to continue to support original, trusted, and quality journalism.

“We are pleased to build on years of partnership with NZME as a major New Zealand publishing partner. We’ve helped support the local news industry for two decades and we look forward to continuing to build on this important work to support the future of journalism in Aotearoa,” she says.

A further announcement will be made in relation to the outcome of the negotiation of the final agreements with Google and the commercial discussions with Meta.

As a consequence of signing the Google Letter of Intent, NZME has notified the News Publishers’ Association of New Zealand Inc. and the New Zealand Commerce Commission that it will not be participating in any collective bargaining with Google unless the parties fail to execute binding agreements on the terms set out in the Google Letter of Intent.

NZME expects to be in a position to provide an update on the commencement of the on-market share buyback next week.

ENDS

NZME Signs Letter of Intent with Google and Updates Outlook

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