Media company NZME have issued a market update this morning. This includes:
- In accordance with offers made by the CEO and independent directors, reduced directors’ fees and CEO salary by 20% from March 2020.
- Implemented a wide scale workforce restructuring project, resulting in the reduction of over 200 positions, including redundancies and removal of vacant positions across the business, representing over 15% of NZME’s workforce.
- Today started the process of asking all remaining employees to continue on a reduced salary basis for a twelve-week period.
The full update:
Market Update: COVID-19 initiatives
AUCKLAND, 14 April 2020: NZME Limited (NZX: NZM, ASX: NZM) (“NZME”) continues to actively monitor the impact of COVID-19 on its business and wishes to update the market on the steps it is taking to mitigate the extent of the impact on NZME and its financial performance.
NZME’s core news and broadcast media business is operating as an Essential Service and is continuing to keep Kiwis in the know. Record audience levels are being seen on nzherald.co.nz and on NZME’s digital radio platform iHeartRadio.
Operational update
NZME is operating effectively with the majority of staff operating from home. However, a number of NZME’s people are required to operate from NZME’s premises to ensure its core business continues to operate effectively, but are doing so with measures in place to protect them. These arrangements will continue to be monitored as we move down the New Zealand Government’s COVID-19 alert levels.Cost saving initiatives
In its 23 March 2020 announcement NZME disclosed that it was implementing a number of initiatives to reduce costs and capital expenditure across the business. All operating expenses have been reviewed with a view to minimising overall costs and cash outflows. To date NZME has:
- Applied for and received the government wage subsidy for all eligible employees.
- In accordance with offers made by the CEO and independent directors, reduced directors’ fees and CEO salary by 20% from March 2020.
- Implemented a wide scale workforce restructuring project, resulting in the reduction of over 200 positions, including redundancies and removal of vacant positions across the business, representing over 15% of NZME’s workforce.
- Requested employees to take annual leave.
- Temporarily suspended products, including a number of newspaper inserted magazines covering real estate, motoring and travel, and reduced sports coverage and publication of community newspapers.
- Ceased broadcasting Radio Sport and reduced the size of NZME’s sports coverage teams, with the expectation that NZME can substantially transfer the revenues from these operations to other NZME products.
- Reduced overall discretionary spend and sought rental abatement from its landlords.
- Reduced planned capital expenditure for the remainder of 2020.
- Today started the process of asking all remaining employees to continue on a reduced salary basis for a twelve-week period.
FY20 Outlook
With the Alert Level 4 lockdown in place, NZME is expecting April 2020 advertising revenues to be approximately 50% lower than April 2019. While it remains impossible to predict with any accuracy the impact of the pandemic on NZME’s full year financial performance, it is anticipated that revenue will be significantly down on the corresponding period in 2019. The cost saving initiatives above will partially offset the anticipated revenue declines. NZME will continue to monitor the revenue performance and the potential cost saving initiatives into the future.
The economic impact of Covid-19 was always going to hit media companies hard. They were already struggling with the massive move of advertising revenue online to global companies like Google and Facebook.
Your NZ 
Blazer
/ 14th April 2020This is a trend in media these days with or without C19.
Increasingly C19 will be used as an excuse for earnings decline by incompetent,over paid,under performing management in all sectors.
Ray
/ 14th April 2020Or lack of income (advertising) requires a cutting of clothes to suit the cloth (incomes).
Duker
/ 14th April 2020NZ Herald has gone down the path of tailoring its stories and clickbait headlines towards Facebook news feeds and likes rather than the traditional web news browser.
Its been a failure as revenue hasnt come in enough
David
/ 14th April 2020They want taxpayers funds, its either that or Arderns narrative for economic meltdown for 14 infections a day will get a thorough going over.
I dont know if anyone else has noticed but Stuffs coverage has been very good and the Herald behind the paywall has been pretty awful and mainly just overseas coverage.
Pete George
/ 14th April 2020duperez
/ 14th April 2020NZME staff member:
“Why are Air NZ and Qantas bosses taking pay cuts – the outbreak isn’t their fault.”
“Foran, who’s been running Air New Zealand for about five minutes (and as far as I can work out has spent the opening days cleaning planes and taking a pay cut) must be wondering if his luck has turned.
There he was at Walmart living the American dream when the chance to run a smallish airline back home came up.”
The CEO and independent directors will be looking forward to tomorrow’s spin. From the same commentator it will probably be ‘inspired leadership’ and leading by example.
Duker
/ 14th April 2020Newspapers arent all journos, there are a surprising number of sales and marketing staff, Im thinking they are the hardest hit of this round.
I use a digital work around to get the herald stories inside the paywall, but their web pages are pretty thin with many items repeated on a topic page.
Alan Wilkinson
/ 14th April 2020Maybe they’ll listen to Bob Jones now.
Blazer
/ 14th April 2020God knows why….Al’s 3 heroes -Trump,Boris and Jones…..3 show ponies all form and no substance when it comes to character.
Alan Wilkinson
/ 14th April 2020Three people who tell it like it is and don’t give a damn for conventional wisdom.
Duker
/ 14th April 2020Is that what you call his humorous asides and bon mots…surely you arent taking them seriously like you dont do with Trumps ‘wisdoms’
Alan Wilkinson
/ 14th April 2020Who are you talking about?
Duker
/ 14th April 2020You . Your constant reassurance never to take Trumps wisdoms at face value . And now that Jones testified -dont take me seriously – you do.
Alan Wilkinson
/ 14th April 2020No, you are talking about Jones. If you can’t tell when he is serious or joking I see no need to assist.
Alan Wilkinson
/ 14th April 2020For Duker’s benefit, this is Bob Jones joking:
https://nopunchespulled.com/2020/04/14/being-prime-minister-for-a-day/
Pink David
/ 14th April 2020“This is an important point. Most every journalist I know is unimaginably deep in this story. Working epic days to get it out. Their reward is at best a huge pay cut, at worst a redundancy. Just a terrible day”
The media have been central to creating this crisis. They are reaping what they have sowed.
Alan Wilkinson
/ 14th April 2020Paul Henry is coming back on TV3. Might get some actual journalism from him but it will be picking over the corpse now.
Pete George
/ 14th April 2020