Prank call costs Austereo $2.8m
THE prank hospital call to the pregnant Duchess of Cambridge by Sydney's 2DayFM cost the radio station's owners $2.8 million in lost profit.
Southern Cross Austereo said the scandal caused a $2.2 million hit to revenue and added $1.4 million in expenses.
SCA did not give a breakdown of the net profit effect but said there was an 0.4 cent decline to earnings per share due to the "Hot 30 impact".
The figure translated into a $2.8 million hit to first-half net profit, which SCA reported as falling 52 per cent to $45.1 million.
2DayFM announcers Michael Christian and Mel Greig were suspended and their Hot 30 program cancelled after they made a prank call in December to London's King Edward VII Hospital posing as the Queen and Prince Charles. Nurse Jacintha Saldanha, who took the call at the hospital, was later found dead in a suspected suicide.
SCA chief executive Rhys Holleran on Tuesday said the company had "put our processes under the microscope" in response to what he described as an unforeseen tragedy. "We are reasonably happy with what we have seen and we have seen some areas where we think we can do better than we previously did," he said.
SCA said any continuing financial effect would be immaterial and that the broadcaster's radio brands remained strong with audiences.
InvestSMART FORUM: Come and meet the team
We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free