The Government has announced plans to have TVNZ and RNZ fully merged by the middle of next year. 

Broadcasting and Media Minister Kris Faafoi confirmed today the Cabinet had accepted the Business Case Governance Group's recommendations and agreed to set up the new structure. 

"The new public media entity will be built on the best of RNZ and TVNZ, which will initially become subsidiaries of the new organisation," Faafoi said. 

"It will continue to provide what existing audiences value, such as RNZ Concert, as well as better reaching those groups who aren't well served; such as our various ethnic communities and cultures." 

The Herald yesterday outlined details of how the merger would work. 

Sources have told the Herald that Cabinet has signed off a plan that would disestablish both organisations to create a new entity. 

Under this new structure, RNZ properties would remain commercial-free, while TVNZ would still have some commercial imperatives but would not have to pay a dividend to the Government. 

It's understood that the new entity will be based on a not-for-profit model. 

As a general rule, the public interest emphasis will override the commercial imperative within the firm. 

The merged organisation will be an autonomous Crown entity with complete editorial independence. 

Faafoi said that the entity would operate under a charter, set out in legislation, and provide trustworthy news as a core service. 
 
Its obligations would include having to provide public media content to all New Zealanders, including groups who are currently under-serviced or under-represented. 

In addition to Government funding, the new entity will carry advertising. However, services that are currently commercial-free will remain so once the change happens. 

Sources have also revealed to the Herald that TVNZ would no longer have to pay a dividend to the Government. 

An establishment board will be appointed next month to oversee the detailed design of the entity and the change process, with the aim of having it operational by July 1 next year. 

"We know what we want this new entity to achieve, and a legislated charter will set out the entity's purpose and objectives," Faafoi said. 

Now that Cabinet has signed off on the plan to proceed, the focus will shift to drafting legislation to form the new public committee. A select committee will then review the draft legislation in the coming months, providing an opportunity for submissions from interested parties. 

The announcement today follows a protracted process in which the Government appointed consultancy PWC to assess the case for a new public entity. 

Faafoi said that the business case, which looked at the feasibility of and best approach to creating a new entity, emphasised the importance of public media and its role in society to provide trusted news and content that reflects our people and cultures. 

"It also confirmed the pressures New Zealand's public media is facing retaining audiences and attracting new ones, particularly young people, in the face of access to global platforms." 

Faafoi noted that the current structure was focused on radio and television and that this would need to evolve to future-proof New Zealand's public media. 

"New Zealanders are among some of the most adaptive audiences when it comes to accessing content in different ways, like their phones rather than television and radio, and from internet-based platforms," he said. 

"We must be sure our public media can adapt to those audience changes, as well as other challenges that media will face in the future." 

RNZ chief executive Paul Thompson and newly appointed TVNZ chief executive Simon Power will have to work together to bring this vision to life. 

But not everyone is convinced that fusing the distinct cultures of TVNZ and RNZ is a good idea. 

Speaking to the Herald yesterday, National Leader Christopher Luxon said the TVNZ-RNZ merger was "just not worth it". 

"I think the Government is just trying to mash together two irregular jigsaw puzzle pieces. 
"You're mixing together two very different beasts in many ways. I think we're much richer for them telling their individual stories of New Zealand to New Zealanders." 

Luxon called the process "a bit of a mockery" and said that it was a "forced fit". 

"When you look for mergers and acquisitions - and I've done a lot of them in my life - what you're looking for is natural synergies and chemistry and alignment and to put RNZ together with TVNZ doesn't make any sense in my mind." 

NZME chief executive Michael Boggs expressed concern about the effect the merger could have on New Zealand's media landscape. 

"Additional government investment into this new entity can only add to the intense competition and cost pressures that already exist across New Zealand's commercial media," Boggs said. 

"With TVNZ seemingly no longer required to pay a dividend to government, this frees up millions for reinvestment into expanding the new entity's digital platforms, commercial capabilities and journalistic talent pool – further increasing audience and competition for advertising revenues." 

Boggs said that more detail was required to fully understand the impact of the move. 

"We are also keen to understand how the current public media philosophy will be upheld across a commercially incentivised entity," he said. 

"NZME awaits the details of the draft legislation and charter with interest, and we look forward to further engagement with the Government in coming months." 

Interested parties, both supporters and opponents, will be permitted to share their views when the draft legislation is considered. 

Today's announcement marks the first step in what promises to be a long road to merging the two organisations. 

Details on the proposed executive structure and the logistics of bringing the organisations together are still unclear at this stage. 

The onus will likely rest on the establishment board to work through these issues in the coming months to meet the Government's preferred deadline.