Royal prank call costs to 'bleed through' for SCA

The impact of the royal prank call scandal will “bleed through” to the second half of the year, according to Southern Cross Austereo’s CEO Rhys Holleran.

Speaking at their first half financial results briefing today it was revealed profits have halved so far this year, thanks largely to content partner Ten’s underperforming shows, and the December prank call incident.

Holleran said before the incident, where nurse Jacintha Saldhana committed suicide after putting through a prank call from 2DayFM DJs to a ward where the Duchess of Cambridge was being treated, radio revenues were “getting back to where they were 18 months ago”, but that had pushed them back down.

However, he was optimistic it would not have a long-term effect on advertisers and listeners saying: “In terms of the event there’s evidence when there’s a bit of clear air people can understand it a little bit better, and I think the initial reaction and the reaction two months later will be different, and I think clients rationalize these things as well.”

Research into the state of the brands since the December occurrence has shown the public and advertisers regard it as an “unforeseen tragedy”, he added, but admitted there have been changes to the content policy of the station following the incident.

The company is also currently negotiating a new broadcast deal with Ten, but has said it will not be hurried into an agreement before the current July 1 contract expires.

Several ratings flops for Ten have led to a substantial drop in ad revenues, and Holleran added: “We are confident we will have programming beyond July 1. It’s a really important issue for the group and its important we don’t rush it and get the rate right.”

There was also talk of refinancing of debt with banks, but that will not happen until after the affiliation deal is sorted out.

Holleran said he expects the election will be “positive” for the media, as will the TV ratings for Ten content, he said, with more certainty in the schedule and stronger depth of programming making it easier to sell.

But a positive upswing in TV revenues in January will not be reflected in their second half figures, he said, adding: “It’s true to say our product resonates less in January than any other time because of things like the cricket, so you won’t see any of that knock-on in our January figures.”

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