Southern Cross Broadcasting will have to wait another five months, but it finally has been handed the opportunity to get a decent return on its expensive Sydney AM station 2UE by the decision of John Laws to retire from November.
Laws and Southern Cross have had to suffer the ignominy of running third or fourth, or lower at times, behind 2GB and the under-funded shoestring operation known as 702, the ABC’s AM local radio station in Sydney which has been a strong rater now for the best part of six years.
Southern Cross paid the Lamb family a reported $90 million for 2UE when it was the top station, thanks to Alan Jones and John Laws who were raking in the ad revenues. Southern Cross failed to keep Jones who defected to 2GB with a share of the equity in Macquarie Radio, leaving Laws at the old station and struggling.
His audience shrank, as did his ad rates and revenues: at their peak he was averaging some $18 million a year in revenues for his morning program from 9am.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
He was also networked to around 60 other stations across the country, much to the continuing chagrin of Jones who has pushed 2GB to get a similar arrangement, to no avail.
The last radio ratings survey in Sydney showed 2UE running fourth behind 2GB, 702 and the FM music station, 2Day.
Laws was equal second with Virginia Trioli of 702 behind the leader, Ray Hadley on 2GB. Laws’s share lifted to 8.5 from 6.9, a good result.
Once Laws and his salary, estimated at around $4 million a year (Eddie McGuire-like), disappears, Southern Cross will be looking for an upturn in earnings from 2UE, which was given a big cost-cutting haircut a year ago after Sydney radio revenues tanked.
The Laws departure, after 55 years in radio (he started in Bendigo back in 1953) means a major ego’s position is now open in the biggest and toughest radio market in the country.
2UE can shift Mike Carlton from breakfast into mornings, finding a partner for Peter Fitzsimmons, or it can recruit. Trioli is still too Melbourne for some listeners in Sydney. And even though she is running second in the shift, her share is currently below the 9% or more her predecessor, Sally Loane, was getting at the end of her time in radio.
Southern Cross has just put the cost-cutting axe through 3AW after a couple of relatively poor surveys in the Melbourne market. It could try to network 3AW star Neil Mitchell to Sydney, but whether that would work is problematic. Sydney is a bigger and tougher market.
It’s why the performance of 702 — in clambering back into second spot — is a far better effort than other stations in the ABC network would want to believe. 774 in Melbourne thinks it’s doing pretty well, but it’s not a top-two finisher like 702, and it operates in a far weaker radio market.
You can also expect 2GB and Jones to make a determined effort to try and replace Laws in that national syndication arrangement.