Dec. 10 (Bloomberg) -- The Australian radio station that made a hoax call to a London hospital about the Duchess of Cambridge said it’s canceling 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,” Rhys Holleran, chief executive officer of Southern Cross Media Group Ltd., which owns the 2Day FM station, said in a video message on its website. The Hot 30 show, which broadcast the segment, has been terminated, while prank calls have been banned across the company and advertising suspended on the station, Southern Cross said in a regulatory statement today.
Southern Cross 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, Jacintha Saldanha, was found dead Dec. 7.
“The death is being treated as unexplained,” the Metropolitan Police said in a statement on their website, updated Dec. 8.
Telstra Corp., the country’s biggest phone company, and Wesfarmers Ltd.’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.”
The DJs, Mel Greig and Michael Christian, never expected to be put through, according to e-mailed quotes from an interview to be broadcast tonight on Nine Entertainment Co.’s “A Current Affair.”
“There’s not a minute that goes by where we don’t think about her family and what they must be going through,” Greig said, according to the transcript. “The thought we may have played a part in that is gutwrenching.”
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.
“Company protocols were adhered to” in the broadcast of the item, Southern Cross said in its statement. The production team made unsuccessful attempts for discussions with the hospital regarding the program, and the company’s lawyers reviewed the item before broadcast, it said.
“The company does not consider that the broadcast of the segment has breached any relevant law, regulation, or code,” Southern Cross said.
2Day FM, which has the largest share of audiences between ages 25 and 39 years in Sydney, has twice been censured by the Australian Communications and Media Authority over incidents involving Kyle Sandilands, a presenter on another show. The first was after he interviewed a 14-year-old girl who said she had 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,” BBY’s 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.
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.”
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 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.
“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. 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 dropping for a second day, the stock regained its previous level the following week, according to data compiled by Bloomberg.
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. Macquarie Radio recorded operating profit of A$7.5 million in the six months through December 2011.
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