The media

interest. And NZ First, as Government coalition partner, will support the proposal for Kiwishare in a future Stuff subsidiary.’’

Stuff understands that the Kiwishare proposal – as put to NZ First – was that Stuff’s editorial operations would be left untouched for two years: head count, regional newspapers, budget, the lot. The Government would take an equity stake in the Kiwishare for $1. But, if either party welched on the deal the Kiwishare would dissolve and

Melissa Lee says National wants to see a plurality of voices maintained in the media. the companies would be separated out again.

It is understood that there may also be an option on the table to make the Kiwishare last three years, if that got the deal over the line with Labour.

Stuff understands that there has been little progress on the deal since the news broke last last year, but that there may well be a proposal back before Cabinet in the next couple of months. Nine is waiting to see if NZME can get enough finance in place to even launch a realistic bid, and even then the deal would have to go past Cabinet and still get Commerce Commission approval.

Although one would assume that the commission would not be tone deaf to the Government approving a Kiwishare arrangement, it would still have to follow that process and the outcome would be uncertain. The commission is separate from government and could well still rule against any merger.

To date Labour has kept its own counsel on whether or not it supports the Kiwishare, but NZ First’s announcement was clearly designed to box the party in and limit its options.

Either way, while Nine wants Stuff gone – it is a subsidiary that made A$30 million on revenues of A$243m in a company with a current market capitalisation of A$3.1 billion – Stuff understands that Nine expects any sale to NZME would take most of the year and almost certainly would not be concluded during this election cycle.

The problem is that the devil would be in the detail and coming up with a workable proposal that would both give NZME sufficient control over Stuff and also streamline the company and keep Cabinet and then the Commerce Commission happy, will be very difficult.

Nine has consistently said the company is being held for sale, but that in the absence of a buyer, it will get on with plans to continue to operate the business.

Faafoi remains open-minded about the deal but will not give much away – both because it is commercial-in-confidence and also because he has no proposal in front of him at present.

‘‘If we get one, then we’d gauge [the] temperature from colleagues if we wanted it to be considered, then we might look to make a decision, but that’s a pretty general process there.’’

He also says that even if the Government were to have a Kiwishare proposal in front of it, any potential merger would still have to go back to the Commerce Commission.

‘‘That’s crucial, that has been the position of NZME, we’d have to go back to the Commerce Commission for a degree of certainty. So at the end of the day the proposal would have to meet their concerns, if there were any, around competition.

‘‘While we have direct responsibility for public media, we are certainly mindful of the need to deal with issues in the commercial markets as well,’’ he said.

That begs the question of how a potential National-led government might view the deal.

‘‘The National Party’s position was that we wanted to make sure that there is plurality of voice in the media, and if the Commerce Commission has said [a] Stuff-NZME merger wasn’t going to happen, is it OK for public media to merge but not private media?’’ said Melissa Lee, National’s broadcasting spokeswoman.

‘‘I understand the commercial imperatives, and I can understand mergers because some companies aren’t making a profit or returns. I feel that pain – in an economic setting you want to make sure you are turning a profit. Having said that, when you actually want diversity, when you create one giant, I’m not so sure that’s a good model. It will be a case-bycase situation.’’

Lee’s key concern – and that of leader Simon Bridges – is maintaining a plurality of voice in media. That means that National is currently opposed to the public broadcasters merging, although the party would like to see the details.

‘‘We will have to discuss if the government chooses to change the TVNZ model. For me the TVNZ model has a mandate to return a dividend and they need to do that.’’

Lee also pointed out that Faafoi’s announcement on Friday did not mention Ma¯ ori TV or non-English broadcasting.

‘‘It’s election year and the Government is still working on policy. We’ve been very disappointed Government has just spent money on working groups to work on it.’’