re: Southern Cross Broadcasting- sinking with 2UE.
Buying 2UE was a big mistake.
They didn't realise the level of reliance the station had on Alan Jones.
Last year 2UE wrote $35M in advertising, and averaged approx 12.5 points in the radio surveys.
This year, with the departure of Alan Jones to rival station 2GB, they'll probably average 8 points, and their advertising revenue is likely to fall below thw $20M mark.
This means that the departure of Alan Jones has saved SBC approx $4M in salary expense, but cost them close to $15M in lost revenue.
All in all, the net effect is a reduction of $10M from their bottom line following his departure.
Contrary to the spin from Tony Bell and the SBC that the departure will actually be benificial to the company financially, it's caused a big black hole in their performance this year, and will cause even more pain next year as 2UE fall in the raitings even further.
The spin in the release today re the profit being below expectations because of the bad advertising climate is laughable.
They don't have the face to admit the real cause of their bad performance.
In truth, the acquisition of 2UE, and their trust in the 2UE brand over Alan Jones has been one mega stuff up, and they're paying for it now.
All in my humble OPINION.
SBC Price at posting:
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