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Royal Phone-Hoax Death Prompts Review of Sydney Radio Show

The Australian radio station that made a hoax call to a London hospital about the Duchess of Cambridge said it’s suspending the show and will cooperate with authorities after a nurse who answered the phone was found dead.

“The radio show won’t go ahead into the future and will be reviewed,” Rhys Holleran, chief executive officer of Southern Cross Media Group Ltd. (SXL), said in a video message on its website. Advertising on its 2Day FM station has been suspended and the company plunged the most in about 15 months in Sydney trading today.

Two presenters from 2Day FM impersonating Queen Elizabeth II and Prince Charles phoned London’s King Edward VII hospital last week seeking details about the health of Kate Middleton after she was admitted for acute morning sickness. The nurse who took the call was later found dead.

Telstra Corp. (TLS), the country’s biggest phone company, and Wesfarmers Ltd. (WES)’s Coles supermarket chain cut advertising on the station amid worldwide debate about the incident. A post about it on the station’s Facebook page attracted almost 26,000 comments and an online petition calling for the presenters to be sacked had signatures from Toronto to Cyprus.

“These young DJs are trying harder and harder, and the marketplace has become very competitive,” Mark McDonnell, an analyst at BBY Ltd. in Sydney, said by phone. “There’s relentless pressure on coming up with something that will be new and fresh and topical.”

Audience Share

The DJs, Mel Greig and Michael Christian, have given an interview to be broadcast tonight with Nine Entertainment Co.’s news program “A Current Affair,” according to a post on the show’s Twitter account.

2Day FM, which has the largest share of audiences aged 25 to 39 years in Sydney, has twice been censured by the Australian Communications and Media Authority over incidents involving presenter Kyle Sandilands. The first was after he interviewed a 14-year-old girl who said she’d been raped and the second was after he insulted a female journalist on air.

“When these sorts of incidents start becoming repetitive the regulators no longer look at it as an isolated case,” McDonnell said. The hoax call may prompt the regulator to examine whether the station’s culture needs to be overhauled, he said.

The ACMA is “engaging with the licensee” for 2Day FM about the “facts and issues surrounding the prank call,” the regulator said in a statement on its website.

Southern Cross dropped 5.9 percent to A$1.04 at the close in Sydney trading. That was the largest decline for the stock since Sept. 12 last year.

‘Incredibly Distraught’

The board of Southern Cross met yesterday to consider what action to take. The two radio presenters are “incredibly distraught” and have been asked not to comment at this stage, Holleran said in the web statement.

New South Wales police have received a request for assistance from London’s Metropolitan Police Service, Deputy Commissioner Nick Kaldas said on Sky News yesterday.

“It hasn’t been indicated to us that an offense has occurred and they have not actually asked for anything yet,” Kaldas said. “They’ve simply touched base, let us know of their interest and they will get back to us if they actually want something done.”

‘Extremely Foolish’

Lord Glenarthur, chairman of King Edward VII hospital, wrote to the radio network describing the phone call as “truly appalling” and “extremely foolish,” British Broadcasting Corp. said Dec. 8. He wrote to the network a day after nurse Jacintha Saldanha was discovered, having apparently killed herself, according to the BBC.

The Duke and Duchess of Cambridge are “deeply saddened” by the death, St. James’s Palace said in a statement on Dec. 7, a day after the duchess left the hospital. Prince William canceled his attendance at the British Military Tournament yesterday to spend time with the duchess, the palace said in a separate statement.

Saldanha will be buried in India, the BBC reported, citing a statement from her husband Ben Barboza on his Facebook page.

Australia’s government is considering the findings of a report into the country’s print media, an inquiry made in response to allegations of phone hacking at News Corp.’s News of the World newspaper in the U.K. Measures to deal with invasion of privacy “need improvement,” the report concluded.

Invasions of privacy might sometimes be justified if they were “puncturing the pomposity of powerful people,” David Vaile, vice-chairman of the Australian Privacy Foundation, said by phone.

‘Powerless Individuals’

“Doing pranks that involve compromising essentially powerless individuals in the pursuit of ratings, I’m less sympathetic to that,” he said.

Still, any effects on Southern Cross from the hoax call are likely to be short term as regulators would deliver no more than a “slap over the wrists” and advertisers would probably return, BBY’s McDonnell said.

2Day FM presenter Sandilands’s most recent censure, when he insulted a female journalist, “had a minor effect on revenues in H1 and is expected to be immaterial in H2,” Holleran said in a February presentation.

Macquarie Radio Network Ltd. (MRN) fell 6.3 percent on Oct. 2 to its lowest in four and a half months after companies pulled advertising over remarks presenter Alan Jones made disparaging Prime Minister Julia Gillard. After falling for a second day, the stock regained its previous level the following week, according to data compiled by Bloomberg.

Share Rose

Jones’s share of radio audiences actually increased after the incident, to 17.3 percent from 16.8 percent, Macquarie Radio’s executive chairman Russell Tate told the company’s annual shareholder meeting Nov. 15.

The incident would reduce profit by between A$1 million ($1 million) and A$1.5 million in the first half and have “minimal if any” impact on the company’s second half, Tate said, without specifying which measure of profit he was referring to. The company recorded operating profit of A$7.5 million in the six months through December 2011.

To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net

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