(Image: Tom Red/Private Media)

Regional TV and metro radio group Southern Cross will resume dividends after a lift in earnings. The five cents a share is the first payout to shareholders for more than a year, but like so many other companies, there was help — a lot of help — from the Morrison government for this recovery in profit.

A note in the announcement hints at the government largesse:

The group reported revenues of $528.6 million, a decrease of 2.1% on the prior year revenues of $540.2 million, and earnings before interest, taxes, depreciation and amortisation (“EBITDA”) of $125.9 million, an increase of 16.4% on prior year EBITDA, (before loss on assets held for sale), of $108.2 million.

EBITDA for the period included government grants, for JobKeeper and public interest news gathering (PING), totalling $40.5 million as described in note 6 ‘government grants’ to the financial statements. Net profit after tax was $48.1 million for the year ended 30 June 2021, up from a profit after tax of $25.1 million for the same period in the prior year.


That hides the real story: the $40.5 million on government handouts allowed Southern Cross to slash staff costs by 21%, from just over $188 million to $147.56 million in the year to June. Before the $41 million in assistance (JobKeeper, $31.9 million, up from $16.05 million in 2019-20) and the PING payment of $8.6 million (nil the year before), staff costs fell only $4 million, from $192.4 million to $188 million.

And its revenue only dipped by 2.1% in 2020-21.

So Southern Cross got 10 times the benefit from JobKeeper and the PING payment than it did for its own cost-cutting assets, and it’s no wonder net profit almost doubled to $48.1 million from $25.1 million the year before. Without JobKeeper and the PING payments, its bottom line would have been thinner and shareholders would not have received their five cents a share payment.

But as they say on the home shopping channels on commercial TV, wait, there’s more — more rewards for lucky executives.

Southern Cross paid more than $1.3 million in “short-term incentive bonus” (STIs), according to the executive payments list for the year to June. CEO Grant Blackley received an STI of $460,000, the largest, which helped boost his total remuneration for the year to more than $1.69 million, from $788,641 in 2020 (no bonuses were paid).

Southern Cross, though, is not the only media company to use JobKeeper to help boost earnings and remunerate senior executives. On Monday Seven West Media revealed that CEO James Warburton was paid a bonus of $1.01 million out of a total of $1.89 million for the year to June. Seven has refused to repay more than $50 million in JobKeeper payments. It earned a profit of $318 million in the year to June.

A final question: did any of these companies make bonus or other extra payments to staff in the year?

Is it about time these companies were forced to repay their JobKeeper payments? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name if you would like to be considered for publication in Crikey’s Your Say column. We reserve the right to edit for length and clarity.