Royal prank call cost radio station $2.8m 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 a 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.
"We have done a lot of research into our own brands and I think with our own audiences and we just wrapped that up recently and they seem to be in pretty good shape," Mr Holleran said.
SCA suspended advertising on 2DayFM in December after a public backlash over the prank call, as major retailers such as Coles and Telstra pulled their advertising from the station.
Mr Christian has since returned to the airwaves, while Ms Greig was expected to return at a later date.
Frequently Asked Questions about this Article…
SCA said the prank call translated into a $2.8 million hit to first-half net profit. The company reported a $2.2 million hit to revenue and an additional $1.4 million in expenses related to the incident, and said there was a 0.4 cent decline to earnings per share due to the “Hot 30 impact.”
In December, 2DayFM announcers Michael Christian and Mel Greig made a prank call to London’s King Edward VII Hospital posing as the Queen and Prince Charles on their Hot 30 program. The stunt led to a public backlash, suspension of the presenters and the show being cancelled, and subsequent advertiser withdrawals that contributed to the financial hit.
Yes. SCA suspended advertising on 2DayFM in December after a public backlash, and major retailers such as Coles and Telstra pulled their advertising from the station.
SCA suspended the two presenters and cancelled the Hot 30 program, suspended advertising on 2DayFM, and said it put its processes “under the microscope.” The company also conducted brand research and indicated it would look to improve areas identified by the review.
SCA said its radio brands remained strong with audiences. The company said it had done a lot of research into its brands and that, based on that work, the brands “seem to be in pretty good shape.”
The nurse who took the call, Jacintha Saldanha, was later found dead in what was reported as a suspected suicide. The incident was described by SCA’s CEO as an “unforeseen tragedy.”
Michael Christian has returned to the airwaves. Mel Greig was suspended and, according to the article, was expected to return at a later date.
SCA said any continuing financial effect would be immaterial. While the incident contributed to a $2.8 million hit to first-half net profit and a noticeable drop in reported profit for the period, the company indicated it does not expect lasting material financial damage.
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