Seven looks to cut pay,  jobs to survive crisis

Seven West Media is looking to cut jobs and staff pay by 20 per cent in a bid to get though the coronavirus crisis.

Seven West Media chairman Kerry Stokes and CEO James Warburton Picture: Nikki Short

Seven West Media, which is controlled by billionaire Kerry Stokes, is looking to tap the federal government’s $130bn JobKeeper payment scheme if eligible amid the coronavirus crisis, as the embattled media group looks to cut jobs and staff pay by 20 per cent.

A week after the free-to-air television and publishing company abandoned its annual earnings guidance, blaming a poor outlook for ad bookings, chief executive James Warburton has told staff that they “all need to work together to ensure that our people and our business can get through the next few months”.

Mr Warburton said Seven was examining the JobKeeper package benefits announced by Scott Morrison on Monday aimed at helping steer the economy through the worst of the coronavirus downturn.

“Once this package is legislated, we will seek to determine the company’s eligibility and if we qualify, we will update you with the outcome and plans to implement,” he said in an email to staff on Wednesday.

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Seven, which was under pressure even before the COVID-19 crisis hit given a structural shift in broadcasting markets and a $541m debt pile, is the latest Australian media company to outline its cost-cutting plans to deal with the accelerated drop in advertising revenue. Seven also owns The West Australian and Perth’s Sunday Times newspapers.

The nation’s two biggest media companies, News Corp Australia, publisher of The Australian, and Nine Entertainment have also announced major cost-cutting initiatives over the past week, including cutting their publishing operations and workforce, and ordering staff to take leave.

Prior to the coronavirus pandemic, Seven was hoping to attract big brands during its broadcast of two marquee events, the AFL and Olympic Games in Tokyo, but that ad money will not materialise now. However, it is understood the postponement of the Olympics until next year is set to save the group about $70m. It is unclear what the financial impact will be from the AFL’s decision to suspend the season for the next few months.

Outlining the austerity measures, Mr Warburton said all staff earning between $80,000 and $200,000 — and not covered by an enterprise agreement — “will be asked to work a four-day week with a commensurate 20 per cent reduction in salary”.

Those earning more than $200,000 “will be asked to accept a 20 per cent temporary salary reduction and continue to work a five-day week”, he said.

Mr Warburton said staff would be allowed to take accrued annual leave to cover the enforced cut in hours but that “once annual leave is exhausted, the fifth day will be unpaid”.

“Despite all these measures, due to the significant impact to the business, some job losses will be inevitable,” he said.

Mr Warburton said the moves would be “under constant review and may need to be extended”.

In February, Seven cut its full-year underlying earnings guidance to between $165m and $175m, subject to market conditions and improved TV ratings.

Prior to the COVID-crisis, Mr Warburton was looking to sell and buy assets as part of his plan to overhaul the loss-making company, which he joined in August last year following the departure of Tim Worner.