Ratepayers' $1 million used to keep ODT afloat

Analysis.

Crux has discovered that Allied Press (publisher of the ODT, Mountain Scene and Central Otago News) is receiving unusual levels of financial support from local ratepayers.

The official line from councils is that they have no choice as outdated legislation requires the appearance of local government notices in print. However councils are free to spend their general advertising budgets however they want, even though councils approached by Crux say that modern digital platforms like Crux are not on a 2020 Government approved procurement list.

In speaking to the managers of that list, the Ministry of Business Innovation and Employment, it is clear that local councils can do whatever they want and the procurement list is more focussed on guidance designed for central Government departments and involves contract discounts that the councils we spoke to won't reveal if they are using.

Both the Queenstown Lakes District Council and Dunedin City Council have disclosed a number of "non-approved - non-list" news publishers being paid for council advertising. 

In Queenstown the managers of the council advertising and marketing budget appear to be the same people who journalists rely for information and also LGOIMA (offical information act) requests. Many of the key stories Crux has investigated since 2018 tend not to appear in Allied Press titles.

These are the numbers we have obtained so far.

• QLDC - total ad spend from Jan 2023 to July 2024  (including "non-list" Lakes Weekly Bulletin, Wānaka and Qtown Apps etc).        $577,761
• QLDC - Allied Press spend (Mountain Scene etc).  same period      $221,241
• QLDC  - Crux spend $0
• Dunedin City Council -  2023/2024 Allied Press (ODT)  advertising  $676,576
• Dunedin City Council -  2023/2024 Allied Press (ODT)  subscriptions  $13,967

CODC (the only council to give us a full breakdown)

• Positively Maniatoto - $4,795
• Teviot Bulletin - $3,065
• Cromwell Bulletin - $18,173
• CO News/Allied Press/ODT - $53,574
• ODT – 9,486
• Central App – $22,830
• Radio Central - $8,625
• MediaWorks - $9,199

Crux has recently had to shut down our main news operation and make staff redundant, largely due to our inability to generate sufficient advertising revenue. Keep in mind that journalists often earn as little as $60,000 to $80,000 meaning that council ratepayers are potentially the biggest single source of funding for local journalists in this part of NZ.

Crux has this week relaunched as a mainly paid subscription model on Substack - with some free content on our website.

The majority of large Queenstown businesses also withheld advertising revenue.

In spite of Crux having what we believe is the largest local news audience (400,000 page views a month, 1.6 million monthly ad impressions, 40,000 unique users and a 2.5 minute average time on page, plus a monthly Facebook reach of over 500,000) most large Queenstown businesses refused to advertise with us. This includes NZSki, RealNZ and Skyline enterprises. Even the Queensotwn Motor Group, who sold us three Crux vehicles, refused to advertise - with these decisions appearing to come from business owners, not their marketing teams.

One source told Crux that we had been "blackballed" by the Queenstown business community. Our experience certainly seems to back that up, right down to Sothebys who we understand are under pressure from the Lakeview developers to make life difficult for Crux. Sothebys are the local real estate sales agents for Lakeview. We were even banned from belonging to the Queenstown Chamber of Commerce for asking who decided to hire "super consultant" and ex QLDC manager Ruth Stokes as full time CEO. Mrs Stokes was an active advocate for the Lakeview developers while at the Chamber. 

It's a long list of wealthy local companies who clearly felt our journalism was unwelcome, and incidentally treated our sales manager Debbie Knowles with what we believe to be a total lack of respect. One PR organisation, Scope Communications, even refused to supply media releases to Crux. We hope they told their clients and gave a reason! Scope managed the mayoral election campaigns for both Glyn Lewers and Jim Boult, as well as projects for the QLDC and the Queenstown Lakes Community Housing Trust and the Southern Lakes Sanctuary.

Other contributing factors include the ORC, Orbus and Aurora Energy constantly telling as that "their costumers prefer print" which remains a mystery to us as you cant click on information in a weekly print ad - and even if you could it would be out of date. Go figure. 

We'll be publishing more details shortly on the background for our shutdown and redundancies. Another advertising factor that hit us is that many local businesses now don't make their own advertising decisions leaving it instead to Auckland advertising agencies and freelance marketing consultants, all with their own relationships, commission structures and rebates that our one person sales team had no chance of competing with.

Government advertising comes through the same Auckland agency channels - invisible to Crux and of no help to Crux.

The automated Google ads you see now on the Crux website might bring in $350 a month - if we are lucky. 

The Dunedin City Council comms team told us (wrongly) as did the QLDC comms team (wrongly)  - that publications have to be on the Government list to receive council ad revenue.

We escalated this to the DCC's CEO Sandy Graham - who sent us this email on October 23rd - we've heard nothing since.

"Good morning Peter I’ve just a had a short break and am catching up with emails but this one has caught my eye. 

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