Advertiser boycott of 2GB ‘irrational’

The Macquarie Radio Network AGM has been conducted in Sydney this morning.

Executive Chairman, Russell Tate, has addressed the meeting. Here are a few key elements from his speech:

Alan Jones

Speaking on the Alan Jones situation over recent time, Tate referred to the advertiser boycott as "clearly (not) reasonable or rational…….the campaign both threatened and caused massive operational disruption to (our advertisers). One advertiser stopped counting after receiving 100,000 emails"

Mr. Tate went onto say:

"We will never know the actual cost of this episode – some (advertiser) bookings were cancelled, some were deferred and some were moved to other time zones on the station. A total of 15 only advertisers have advised us that they do not intend to advertise on 2GB again from a total of 647 individual advertisers in the Alan Jones Breakfast Show in the prior 12 months and a total of 209 individual advertisers in September alone.

Our best estimate of the profit impact to MRN is somewhere between $1 million and $1.5 million in the current half year period. We are confident that in the second half of the year there will be minimal if any residual impact"

Financials

"Our earnings for the 6 months to December 31 have been impacted by the events surrounding Alan Jones in October, the Sydney radio market's contraction on the prior year (2.2% down for the 4 months to October) and lower than expected recovery of expenditure from our Olympics broadcasting rights. Our expectation at this time is that the underlying earnings (EBITDA) for the 6 months to December 2012 will be around the $6 million mark, a 36% decline on prior year underlying levels. The half year reported result will however improve by over $1m (an increase of over 30%) largely due to the absence of the loss making MTR."

MTR

"MTR was always going to be a big challenge. The Board nevertheless, and in hindsight foolishly, accepted my recommendation back in late 2009 that we risk some of the significant earnings gains we were achieving through our Sydney stations in an attempt to establish a foothold in the Melbourne market by launching a second news-talk station there. In total this failed venture into Melbourne cost MRN $5.5 million in the 2011/12 year and a total of $12.675 million (before tax) overall."

See the Chairman's report in full here.

See Dan Bradley's piece on why he believes that the social media campaign against 2GB and Alan Jones ultimately will be unsuccessful here.