MediaWorks can no longer make a profit in television so it has put its TV division up for sale.
The station's 500 staff were called to a meeting on Friday morning and told the company would keep making radio but sell off its TV arm because it is no longer financially viable.
Chief executive Michael Anderson told RNZ business reporter Madison Reidy and cameraman Nick Monro that whilst rumours the network could be closed by Christmas were wrong, a quick sale was needed.
"The last three years, we have consistently improved our ratings. We have improved our prime-time consistency. We've improved our revenue shares, every year," he said
"In that same time, I've been more and more, openly, publicly as well as with government, talking about the structural issues that the free-to-air TV market was facing and they're becoming more and more evident... And that particularly hurts New Zealand because it's less than five million people.
"So I think New Zealand is feeling that disruption quite quickly in the free-to-air market."
He said TVNZ's behaviour is not to blame.
"My view is that the structural inequality that has been slowly, but methodically, and I think inadvertently created over the years through successive governments, through successive decisions.
"There's been various points where decisions have been made that have consolidated TVNZ's leadership position, whether that be, you know, from the beginning of its life where it was granted no debt, whether it be the new premises that it was able to create, whether it be paying no dividends like, currently, when they're moving into loss.
"So now you've got a situation where the government is no longer a bystander. On one hand it needs a healthy, vibrant market. But on the other hand, as a market dominant player invested in maximizing its profit and protecting its own future - then you've got a conflict going on, and more and more I see that structural inequality, adding to the global trends that we're seeing."
He said with the rapid decline of the TV market in the last year, "those three factors have come to play with our view that MediaWorks is no longer the owner that can actually drive a sustainable profit on TV."
MediaWorks is holding on to radio though, as it is still "a high performing business," he said.
"The TV business has been in loss since I got here and was in loss for a number of years before that. Over the last number of years we've really been able to reduce that loss, very significantly to the point of moving towards break-even.
"This year the market has brought into stark relief, that all of those trends make a very uncertain position."
Mr Anderson said MediaWorks has never asked the government for a bailout.
"We've argued all the way along the way that this is an industry issue, and we argued that TVNZ would eventually find itself also in loss, that this was a pending problem.
"So all the conversations with government have been about industry support, in order to try and balance it to make it a healthy industry.
"That's been consistent. Putting MediaWorks TV up for sale is a commercial decision, driven by all those that discussion we've had.
"You know it was suggested earlier that this was a sort of a big bluff to try and force government into some sort of action. And I can categorically deny that that's the case. You would never put your people through this as a bluff.
"With all the information we have this is we believe the best decision to make for MediaWorks and for TV Three."
In hindsight, he said the company could have been more prudent with its spending, but the staff who were sent to Japan to cover the Rugby World Cup had accommodation and flights booked about a year ago.
"Twelve months ago we had no understanding and no idea that we were going to find ourselves in this position."
Mr Anderson said Newshub is critical to society.
"I think any local news is an important asset for any country. I think it's more important for New Zealand than in most, because you don't have a lot of diversity here, everywhere you look you've got businesses that are challenged, news businesses that are challenged.
"You've got two free-to-air, you've got two newspapers, and you've got RNZ, which is not a commercial beast.
"It's very important to maintain that diversity and so we're very proud of what Newshub has become, and what it achieves and what it delivers, and we're very conscious that functioning democracy needs diversity of news."
"We would hope that a new buyer will find a way to be able to continue that and potentially even resource it more effectively than we've been able to."
The MediaWorks board are confident that there will be a buyer, he said.
"If we're unable to sell then this is one of the options that the board has considered. We believe it's the best option we have available to us for both TV and for MediaWorks overall.
"If we found ourselves in a situation where it was not sold, then the board would discuss what those other options are.
"But there are so many different variables that can happen through this process, as well as in the intervening time that any conjecture about what that might look like would be misleading."
"This is not 'we start this process and then there's an inevitable outcome' - that is absolutely not the case."
