ARN, Southern Cross latest media companies to slash salaries

Radio operators both announce employee pay cuts and reduced hour measures as part of efforts to weather the COVID-19 storm

Radio network operators, Southern Cross Austereo and Australia Radio Network, have become the latest media operators to confirm staff pay cuts and reduction of hours across teams as they battle again declining advertising spend in the COVID-19 crisis.

In a statement release today, ARN said all full-time staff would now reduce their working week by one day, with employees able to access annual leave entitlements to help offset the impact on take-home pay. The exception is on-air talent, which will continue to broadcast five days a week but take a minimum 10 per cent reduction in fees.

ARN’s board, CEO and management are also taking a 20 per cent pay cut for six months and foregoing incentives and bonus payments this year. Last week, ARN also confirmed the departure of its CMO, Anthony Xydis.

ARN attributed the decision to declining ad revenue created by the coronavirus crisis, which already seen significant reduction in costs across the business in March. Yet these steps were not enough, and the group said further action was required. ARN operates the KIIS and Pure Gold networks as well as iHeart Radio.

“Although ARN is in a strong position, like all media businesses, our revenue has been significant impacted by COVID-19,” ARN CEO, Ciaran Davis, said. “The priority of the board and management team is the safety and wellbeing of all of our staff. These decisive measures have been put in place to protect jobs and ensure ARN remains in a strong position as a stable business – and employer – in the long term.

“Australia is facing a widespread fall in marketing and advertising activity and our response to this crisis is being reviewed on an ongoing basis as we assess the revenue performance over the coming weeks and months.”

Meanwhile in an ASX statement today, SCA confirmed it was implementing mandatory pay reductions of 10 per cent for all directors, executives and employees earning more than $68,000 per year, cancelling executive bonuses and enforcing mandatory annual leave. These salary-related decisions were expected to have a $20 million - $23 million impact on the 2020 financial year.

In addition, SCA identified a further $22m in marketing, programming and other costs, bringing its latest total operational initiatives up to $45m. Like many media operators across channels, the group is embarking on equity raising to help tie over the business while the crisis continues. The group operates a radio and digital audio offering, as well as regional TV.

In its statement, SCA said FY20 advertising revenue for the nine months ended 31 March 2020 was 10 per cent down compared to the prior corresponding period. It also said it expected Q4 FY2020 and Q1 FY2021 ad revenues to be affected by up to 30 per cent due to COVID-19.

“Additional cost saving measures are identified and can be implemented depending on the length and severity of the economic impact of COVID-19, including further significant reductions in labour costs,” the statement read.

SCA added it expected to be eligible for the Federal Government’s JobSeeker subsidy for about 1600 full-time employees.

“The COVID-19 crisis is causing significant dislocation across advertising markets, but the fundamentals of SCA’s business remain sound,” SCA CEO, Grant Blackley, commented. “The initiatives announced today position us to trade through this crisis and rebound when the recovery phase begins.”

ARN and SCA’s employee salary and hour cuts are just the latest in a sweeping series of similar moves across media organisations as the COVID-19 situation bites into the publishing and advertising ecosystem.

Last week, Seven West Media began slashing staff salaries, with full-time employees earning between $80,000 and $200,000 required to work four days per week and take a 20 per cent pay cut until the end of the financial year. Those earning more than $200,000 are also required to take a pay cut but will still work five days.

"We find ourselves in an extraordinary and challenging situation," SWM CEO, James Warburton, wrote in a staff email, quoted by the Sydney Morning Herald. "We all need to work together to ensure that our people and our business can get through the next few months. To do so, we need to make some changes designed to ensure that we can continue to offer employment to as many of our people as possible.

News Corporation executives have also seen their salaries pared back in a similar measure, as well as reportedly asked staff to work nine-day fortnights, using annual or long-service leave to cover the gap, while oOh!media staff have reportedly been asked to take leave over Easter to help alleviate costs.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia. 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

It's an interesting direction, and fair play that they've backed what their service differentiator in the market is. It's a bit clunky bi...

Jeff

Versa launches bot-activated website

Read more

Algorithms that can make sense of unstructured data is the future. It's great to see experts in the field getting together to discuss AI.

Sumit Takim

In pictures: Harnessing AI for customer engagement - CMO roundtable Melbourne

Read more

Real digital transformation requires reshaping the way the business create value for customers. Achieving this requires that organization...

ravi H

10 lessons Telstra has learnt through its T22 transformation

Read more

thanks

Lillian Juliet

How Winedirect has lifted customer recency, frequency and value with a digital overhaul

Read more

Having an effective Point of Sale system implemented in your retail store can streamline the transactions and data management activities....

Sheetal Kamble

​Jurlique’s move to mobile POS set to enhance customer experience

Read more

Blog Posts

Brand storytelling lessons from Singapore’s iconic Fullerton hotel

In early 2020, I had the pleasure of staying at the newly opened Fullerton Hotel in Sydney. It was on this trip I first became aware of the Fullerton’s commitment to brand storytelling.

Gabrielle Dolan

Business storytelling leader

You’re doing it wrong: Emotion doesn’t mean emotional

If you’ve been around advertising long enough, you’ve probably seen (or written) a slide which says: “They won’t remember what you say, they’ll remember how you made them feel.” But it’s wrong. Our understanding of how emotion is used in advertising has been ill informed and poorly applied.

Zac Martin

Senior planner, Ogilvy Melbourne

Why does brand execution often kill creativity?

The launch of a new brand, or indeed a rebrand, is a transformation to be greeted with fanfare. So why is it that once the brand has launched, the brand execution phase can also be the moment at which you kill its creativity?

Rich Curtis

CEO, FutureBrand A/NZ

Sign in