‘You want to preserve the best parts of your business’: How will SCA cut $10m in costs in six months?

Southern Cross Austereo CEO, John Kelly, announced last week that the network plans to reduce costs by over $15 million, $10 million of which to be cut by June 30 next year.

So, the question must be asked: how will SCA cut $10 million in such a short period of time?

Speaking on the latest episode of the Mumbrellacast, Mumbrella publisher, Adam Lang – who formerly worked as national director of operations and general manager of 2DayFM and Triple M Sydney – said the task ahead for SCA is incredibly difficult and highly complex for several reasons.

“You want to preserve the best parts of your business like how well you’re engaging with your customers, right?” he said.

“What sort of audiences are you getting? You don’t want to lose any of them by cutting great shows. So, you’ve got to keep that customer service going with your audience and hopefully growing. You’ve got to keep your advertising clients happy.

“You want to retain great customers through great salespeople, engaging them on the right solutions for their campaigns. And you’ve got to keep operating successfully. You need a red-hot team to service all of those requirements, from the audience, to clients, to staff.”

The cuts come as SCA ponder a takeover bid from radio rivals ARN, who alongside Anchorage Capital Partners, are looking to create a “focused” metro radio network of 10 stations across Sydney, Melbourne, Brisbane, Adelaide and Perth with each city featuring a KIIS and Triple M brand.

SCA chair Rob Murray confirmed at last week’s AGM that the network is in discussions about the bid, though he said he wasn’t optimistic about an in-principle agreement to be reached by next month.

Lang said juggling ARN’s proposal and cost cuts will be no easy feat, describing it as “highly skilled work”.

“You look at everything from premises, rent, electricity costs, broadcast costs. All the software and systems you use, you look at everything. But you have to look at roles too because it’s a human business and that’s what many of these roles are employed to do,” Lang said.

“So, this is furious work – highly strategic and intelligent work. I wish them the best for it because it’s difficult.”

Listen to the latest episode of the Mumbrellacast here.


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