Richard Davis Took a Paycut to Pay Back the Us Government
Businesses with pre-COVID revenues of less than $1 billion will again need to show a decline of more than 30 per cent, while those over will have to show a drop of more than 50 per cent.
Businesses which file a quarterly Business Activity Statement will have to show a turnover drop between this year's September quarter and last year's quarter, while those filing monthly will have to show a drop between September this year and the same month last year.
"JobKeeper was crucial for [Seven] to help us trade through the period and to keep as many of our staff employed in the business, essentially providing us certainty. It also provided significant benefit to many of our clients who were similarly able to trade through the COVID uncertainty," Seven chief executive James Warburton said.
Seven chief executive James Warburton. James Alcock
Seven also implemented a three-month, rather than six-month, 20 per cent pay cut or four-day week across its entire business for anyone earning more than $80,000, it also had staff run down leave balances and "unfortunately we had to let 20 per cent of our staff go from the television business," Mr Warburton added.
It also pulled out $170 million in ongoing costs, $50 million in temporary savings and sold $150 million worth of assets as it looks to pay down debt.
Australia's property market also took a hit, with various restrictions on movement in different states, and at times bans on open houses. Domain, which is 59 per cent owned by Nine, which also owns the Financial Review, was on the frontlines of the property downturn.
"JobKeeper really did its job. In a period of very deep uncertainty it provided a safety net for businesses to make decisions," Domain chief executive Jason Pellegrino said.
In combination with JobKeeper, Domain offered staff the ability to take part in what it called Project Zipline – giving employees the opportunity to take part in a program where they could go down to four days a week, or take a 20 per cent pay cut, but receive that same amount back in share rights.
The project was taken up by 90 per cent of staff. The project will be wound back in October and Domain is expected to go back to full staff and pay with no job cuts, and has actually hired a number of new employees.
Treasurer Josh Frydenberg announced an extension to the wage subsidy JobKeeper scheme until the end of March 2021. Getty
"In the context of when the decision on JobKeeper was made, that was in a period of time where there really were no answers for any pathway," Mr Pellegrino said, adding now businesses have a better read on what might be the outcome of new situations, such as the second wave in Melbourne.
"It's a really bad outcome, particularly in Victoria, but as a business, we are much more aware and certain about what the patterns of behaviour might actually be going to be, so we can plan a lot better."
Australian Community Media executive chairman Antony Catalano expects the Victoria entity of his business to qualify for the second round of JobKeeper, given the state's strict lockdown, noting there were parts of its regional publishing business that didn't qualify in the first round – such as Tasmania – and others that did. ACM also had staff wind down large annual leave balances to get liabilities off the books.
"Tasmania has probably been the highlight of the group for us in terms of state-based performance... overall it's been a mixed bag, we've had peaks and troughs... when Victoria came out of the first lockdown things started improving pretty quickly, but then the Victorian market deteriorated pretty quickly as well, once the second wave hit," Mr Catalano said.
Mr Catalano said the Victoria lockdown in regional parts – in those places where there aren't cases – of the state has been unnecessarily severe.
HT & E chief executive Ciaran Davis said the radio business ended many of its measures, such as reduced hours and pay cuts, earlier than anticipated after it saw slightly improving markets in July and hopes to see that continue. It has also stood down 45 people from its Australian Radio Network.
"We felt people were working longer and harder than ever on four days a week," he said.
"We're heading into budget season ... some costs are going to have to come back in, we're trying to predict a market that is unknown in terms of growth next year, looking at costs that do have to go back in terms of marketing and investing in other digital audio products that we want to rollout in an environment where we're not qualifying for JobKeeper.
HT&E chief executive Ciaran Davis. James Brickwood
"There's a lot of balls in the area we're going to go through in the next six-seven weeks."
HT & E is planning to invest more in digital audio and data capabilities, but is continuing to look at where it can get efficiencies in other parts of the business.
Mr Davis said HT & E, in one of its smaller businesses, trialled the 20 per cent pay cut for a quarter, but if financial targets were hit, that money was reinstated.
"Everybody knew they'd take a little bit of pain, they'd written it off, but you were keeping productivity going and enthusiasm going and then people felt triply thrilled at the end of the quarter when they were able to get the cash back," he said. "They're the type of things we're looking at [in terms of innovative pay solutions to keep costs down during the pandemic]."
oOh!media has been particularly hit during the crisis, with out-of-home bookings crashing during lockdowns.
"The federal and state governments and their cooperation early was outstanding. I think in the long-term it will set us up for a better recovery," oOh!media chief executive Brendon Cook said.
The advertising business reeled in costs tightly, asked staff to take their leave allotments and many people worked less hours with fewer sales coming in.
Mr Cook said oOh!media was seeing traffic levels in regional areas above the same time last year, indicating holidays being taken in state. In markets outside of Victoria, traffic levels have improved significantly since the height of the nationwide lockdown.
WPP AUNZ chief executive Jens Monsees. Renee Nowytarger
"Traffic is certainly heavy. Our staff are talking about the Tuesday, Wednesday, Thursday traffic. I think people are choosing the Monday and Friday to be a little more homebound."
Carsales chief executive Cameron McIntyre said the car classifieds business took a $28 million hit by making its listings free for a period to help protect jobs at car dealers, and is continuing to make listings free for Melbourne metropolitan dealers because they simply can't operate otherwise.
"It's a bit of investment in your industry and in your customers to try and do the right thing to shore them up, even if it does have a short-term cost for you," he said.
Carsales has stood down a number of staff, but they haven't lost jobs. With the business unlikely to qualify for JobKeeper 2.0, Mr McIntyre said Carsales will essentially fund its own JobKeeper program for they receive pay after this month.
He said there was a snap back in activity after the first lockdown, but in Melbourne that has come back due to the second wave.
"This time around I don't know how strong that snap back will be, but I expect there will be one. I don't know how sustained it will be ... but consumers will buy and sell cars they've been wanting to buy and sell over the last several months but haven't been able to."
WPP AUNZ, which is a holding company for dozens of advertising and marketings businesses, returned to full pay for its staff in August, after asking staff to take pay cuts and reduce working hours back in March.
Chief executive Jens Monsees said despite the range of different businesses within WPP AUNZ – not all businesses qualified for JobKeeper – staff across the business helped by taking some of the pain, even if their company was trading well.
"A very big part of our strategy is reinventing, not restarting the old way...because customer interactions, marketing and media actions have dramatically changed with COVID," Mr Monsees said.
"In all our plans we are not considering we will tap into a part two after October because I think long-term you cannot build a strategy on JobKeeper, you have to be relevant in the market with your offers."
Richard Davis Took a Paycut to Pay Back the Us Government
Source: https://www.afr.com/companies/media-and-marketing/jobkeeper-did-its-job-media-unlikely-to-qualify-for-jobkeeper-2-0-20200909-p55trx