ARN, Southern Cross latest media companies to slash salaries
- 06 April, 2020 10:31
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.
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