NZME media group has slumped to a large loss after writing down the value of its business as it pursues a merger with its rival Stuff.
The company's loss for the year ended December was $165 million, which included a write down of $175m in the value of the business, compared to a profit of $11.6m the year before.
The group owns the New Zealand Herald and other publications, the Newstalk ZB and ZM radio networks, and digital media businesses.
"A challenging advertising market continued to have an impact on print and digital advertising, together with declines in print circulation revenue," the company said in a statement.
The print business remained the group's biggest earner at $192m, just over half of group revenue, but down 9 percent because of falling advertising revenue, but radio income rose 2 percent.
However, it said advertising for the start of this year was down 2 percent.
The company set up a paywall for some content on the NZ Herald website, which it said had a total of 46,000 subscribers and earned $1.7m in the first eight months.
It said the fall in the company's shareprice, down about a third in the past year, meant it was overvalued and that was why it had written down on paper the value of the company.
NZME said further change is coming to the media industry in New Zealand.
"The impact of big international players continued to put pressure on the New Zealand advertising market. In an already highly competitive local media market, there simply aren't enough advertising dollars and not a large enough audience market to sustain New Zealand's current industry structure."
It has renewed a proposal to merge with rival Stuff, publisher of a large number of metro, provincial and weekend newspapers. An early merger plan was knocked back by the Commerce Commission and confirmed by the courts.
NZME has put a plan to the government to merge with Stuff, but ring fencing the journalism parts of the business to preserve their independence.
"While no agreement in relation to the transaction has been reached, we continue to progress towards obtaining the required regulatory approvals," it said.