Southern Cross Media Group Limited (SXL) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Annual General Meeting of Southern Cross Media Group Limited. My name is Rob Murray, the Chairman of SCA. I'm joining you today from Sydney, and we'd like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people. I pay my respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Island people joining us here in Sydney or elsewhere as part of our virtual meeting. I've been informed that a quorum is present, and I'm pleased to officially declare the meeting open. Thank you all for joining us today. Today's meeting is being held in person in our Sydney office and virtually using an online platform provided by Computershare. This platform allows shareholders, proxies and guests to attend the meeting remotely by watching a live webcast of the meeting. In addition, shareholders and proxies can ask questions and submit votes in real time. To allow sufficient time for those participating online to ask questions or vote, I now declare the voting open on all items of business. I will provide an opportunity for those in the room to ask questions and vote later in the meeting. Before moving to some housekeeping matters, I'd like to welcome and introduce my fellow directors, who are joining the meeting today. Grant Blackley, our Managing Director. I'll ask Grant later in the meeting to provide an update on the company's current trading performance and our business strategy for 2023 and beyond. Glen Boreham, who is Chair of our Digital Transformation Committee and also sits on our People and Culture Committee. Carole Campbell, who is Chair of our Audit and Risk Committee and will shortly join the Digital Transformation Committee. Ido Leffler, who is a member of the People and Culture Committee and the Digital Transformation Committee. Heath MacKay-Cruise, who is a member of our Audit and Risk Committee and the Digital Transformation Committee. Having enjoyed a period of transition, Heath will become Chair of our People and Culture Committee after today's meeting and will stand down from the Digital Transformation Committee. Helen Nash is our Chair of People and Culture Committee and a member of our Audit and Risk Committee. Along with me, Helen resigns by rotation at today's meeting and offers herself for reelection by shareholders. As I mentioned earlier, Helen will stand down as our Chair of our People and Culture Committee after today's meeting. We're also joined today by several members of the company's executive team, including Tony Hudson, our company's Secretary; and Rochelle Burbury, our Corporate Communications and PR Director. Tony and Rochelle will assist with online questions from shareholders later in the meeting. I'd also like to welcome Trevor Johnson, who I believe is online. He is from the company's auditors, PricewaterhouseCoopers. Trevor will be available to answer any questions in relation to the audit. Finally, Chris Dedrick from Computershare is also with us today. Chris will act as the returning officer for the purposes of conducting and determining the results of the poll on today's resolutions. Before we move to the formal agenda of the meeting, let me outline the processes for shareholders to vote and ask questions during today's meeting. Voting today will be conducted by a poll on all items of business. As I mentioned earlier, I've opened voting on all items for those participating online and who are eligible to vote. You will see a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you are free to submit your votes at any time. To cast your vote, simply select 1 of the options for each resolution. Your vote on each resolution will automatically be recorded. There's no need to hit a submit or enter button. Please ensure you cast a vote for all resolutions. Once you have voted, you will receive a vote confirmation notification on your screen. You can change your vote at any time before I declare voting closed. To change or cancel your vote, click the leak, click here to change your vote at any time until the poll is closed. For shareholders, proxies and corporate representatives present in person, I'll ask you to vote once we've gone through all items of business today by completing the yellow voting card provided to you when you registered for the meeting this morning. White cards are for visitors only who cannot vote or ask questions today. Shareholders without a yellow card are not entitled to vote on the items of business. I will provide a warning before I close voting at the end of the meeting. As I mentioned earlier, Chris Dedrick from Computershare will act as a returning officer for the purposes of conducting and determining the results of today's poll. We will announce the results of the poll to the ASX later today. It is my duty as Chair to ensure shareholders have a reasonable opportunity to ask questions and discuss the items of business during the meeting. Because this is a hybrid meeting, I'll first take questions from those physically present at the meeting, followed by audio questions from participants who have joined us online and finally, written questions from online participants. If you're attending the meeting in person, only shareholders, validly appointed proxies and corporate representatives who were given a yellow voting card upon registration are entitled to ask questions. When I call for questions, please raise your yellow card, state your name and/or organization you represent before asking your question. For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen and then select send. Confirmation that your message has been received will appear on your screen. You can submit written questions online at any time, and I will address your questions at the relevant time in the meeting. While some constraints may prevent us from answering all questions, we'll do our best to address all your questions during the meeting. If we run out of time to answer all your questions, we will answer them in due course via e-mail or by posting responses on our website. The Computershare platform also provides a facility for audio questions to use this service, please follow the instructions below the broadcast window. Either I or one of my Board colleagues will address your questions towards the end of the meeting. Where appropriate, I will ask Trevor Johnson from PricewaterCoopers to respond to any questions received about conduct of the audit. Your questions may be moderated. And if we receive several questions on one topic, we will amalgamate these questions. Again, if we run out of time to answer all your questions, we will answer them in due course via e-mail or by posting responses on our website. I will now provide a brief overview of our performance during the 2022 financial year, and we'll comment on strategic direction Board matters and the Board's approach to remuneration planning. I will then ask our CEO, Grant Blackley, to update the meeting on the company's operating performance and business strategy. we'll then move on to the other business to be considered and a vote on the resolutions. This year's results were quite frankly, below our expectations as the recovery in broadcast radio markets has been slower than we expected. Although SCA's Audio revenue grew by 9.2% to $392 million, it remains below our pre-COVID 2019 levels. natural disasters, geopolitical events and numerous ongoing pandemic impacts, dampened business and consumer confidence during the year. And many thousands of small and medium business advertisers continue to be affected by labor shortages and supply chain disruptions, heightened inflation and in Queensland and New South Wales by the devastating impact of the floods earlier this year. We're now having another bout of those floods as you will obviously realize. In the face of ongoing economic uncertainty, and an increase in the cost of capital globally, the group recognized impairment charges of $178.6 million net of tax relating to impairment in the carrying value of radio licenses, goodwill and brands. The Board acknowledges that shareholders have experienced a difficult journey since COVID first began to affect SCA and media markets more broadly from early 2020. That said, we were pleased this year to pay dividends of $0.0925 per share, up 85% on the prior year. In addition, we have implemented a share buyback to further improve shareholder returns, and this will continue into the new year. However, we acknowledge there is much to be done to build value for shareholders in the future. Significant positive indicators that emerge this year are the growth to record levels of live radio audiences on both our TAM and HIT networks and the continuing growth in the number of signed end users of LiSTNR. These trends all go well for the audio sector and SCA. We are actively educating the advertiser and agency markets about these trends and of the resilience of the audio sector, and we are cautiously optimistic that advertisers will recognize the value of the reach provided by our platforms and our increasing ability to address our advertisers' messages to highly engaged and relevant audiences. In the most recent survey in September this year, the cumulative audience of SCA's Hit and Triple M stations in the 5 metro capitals of 6.1 million, was its highest ever and 23% higher than in the final survey of 2021. Including our network of 78 radio stations in regional Australia, we have a total radio audience of over 8.6 million Australians. In our top 7 annually surveyed locations, SCA most recently ranked #1 in 60% of available day parts for our target demographics of men aged 25 to 54 for the Triple M network and women aged 25 to 54 for the HIT network. With over 70% of all advertising briefs targeting these two demographics, our regional radio networks provided a strong proposition for advertisers. The continuing trends towards digital consumption and commercialization of media content, including audio, present strategic opportunities for SCA. the group's digital audio revenue grew by 35% in the financial year just ended, and we expect similar growth in the current financial year. At just under $21 million in the last financial year, Digital Audio revenue remains a small proportion of group revenue, but the trajectory is clear. As consumers increasingly choose to listen live and on demand to Audio on digital devices and as advertisers demand more information about the audiences for their commercial messages, SCA will control its own destiny through owning and operating LiSTNR. Our core competency and commitment to localism in the content we create and distribute on LiSTNR together with the trusted way we engage with our physical and online communities differentiates us from the global technology platforms and services that we compete with. For these reasons, we will continue to invest in evolving and driving the scale of LiSTNR to provide audiences with an easy-to-use, intuitive and personalized experience while building and enhancing the suite of premium content available on LiSTNER. This will include targeted investment in our live and local radio shows and news and information services around Australia, along with the curation of our original podcasts such as Hamish on Andy and The Howie Games, and expansion of our domestic and international content and sales partnerships with the BBC, Stitcher, Wondery, Schwartz Media, the Royal Institution of Australia, SoundCloud and others. With record radio audiences migrating to listen to our shows on mobile phones, desktop computers, smart speakers, connected cars and other digital devices, the commercial radio industry and SCA are carefully migrating listeners to new ways of listening and engaging with our brands. At the same time, our industry body, commercial radio and audio is urging the new federal government to legislate to ensure local AM, FM and DAB+ radio is prominently available on car dashboards and our digital devices, given its unique and meaningful contribution to all communities in Australia. This has become an increasingly significant issue as car manufacturing has moved offshore and manufacturers develop cars for global markets. As shareholders are aware, during the year, the Board completed a strategic view of the group's television assets, including engagement with several interested parties, bids from these parties did not align with the Board's valuation, and the Board concluded that value for shareholders will be maximized by continuing to operate the television business. Free-to-air television remains an important and trusted source of information and entertainment in regional Australia, especially in the still large areas with no or limited Internet coverage. Through Free TV Australia, we are, therefore, also asking the federal government to legislate to ensure free-to-air television is prominently available on connected televisions and other connected devices and to update anti-siphoning rules to protect the community's access to major Australian and international sporting events on free-to-air television. Turning now to internal matters. I would like to make a few comments on the Board's approach to executive remuneration. Our executive remuneration framework is designed to attract and retain high-performing executives and to align their reward with creation of sustainable value for shareholders. The 2022 financial year was the first year of operation of our combined executive incentive plan which has replaced the former short-term and long-term incentive plans. This new plan which operates over 5-year cycles provides a simpler and more effective way to directly link executive performance and reward to generation of sustainable positive returns for shareholders. 60% of the annual award is based on profitability and financial performance hurdles, nonfinancial measures accounting for 40% of the annual award include execution of strategic projects and cultural improvements. The annual award to each executive is settled partly in cash and partly in equity performance rights. These performance rights will be eligible for vesting and conversion to ordinary shares at the end of year 3, subject to ongoing employment. Vesting of 1/2 of the performance rights will potentially be scaled back according to SCA achieving satisfactory growth in earnings per share over the 3 years of the plan. A further restriction on disposal of vested shares will apply until the end of year 5, 2 years after allocation of any vested shares. As explained in our annual report, the group did not achieve this year's profitability and financial performance measures, except in relation to management of non-revenue-related costs the Board accepted that the group's underperformance against financial targets was in large part due to public health, macroeconomic and global factors that were not foreseeable at the time the targets were set and which were beyond the control of the executive team. In these circumstances, the Board recognized the proactive and effective actions taken by the executive team to control costs during the year, but exercised its discretion downward toward only 25% of the available reward for achievement of this target. As a result, executives received a small award of 3% out of a possible 60% under the profitability and financial performance component of the plan. In contrast, the Board acknowledged the good progress made during the year on strategic initiatives designed to embed a sustainable digital audio operating model in the business and to grow the user base and commercial potential of listener. These outcomes were driven by targeted investments in original and partner content, technology and marketing as well as recruitment, training and development of our people. cultural and behavioral goals were also substantially achieved during the year, although the Board made some further downward adjustments to recognize a few internal issues. As a result of these assessments, executives received between 38% and 41% of their target incentive opportunities. Half of their awards and 60% of the CEO's award have been settled by grant of performance rights that will be eligible for vesting after the 30th of June 2024, strongly aligning executives' interest with those of other shareholders. Melanie Willis retired as a director during the year, having made a significant contribution to SCA, including for 5 years as Chair of the Board's Audit and Risk Committee. The Board has decided not to seek a replacement for Melanie. The Board's reduced size and its mix of skills and experience are appropriate for SCA's needs. We will, however, make some changes to our committees to balance the responsibilities of directors and plan for future succession. This will include Heath Mackay-Cruise shortly taking over from Helen Nash's Chair of the People and Culture Committee and Carol Campbell, replacing Heath as a member of the Digital Transformation Committee. I thank my fellow directors for their contribution and support during the year and look forward to working with him in the year ahead. I would also like to thank SCA's leadership team and all our people around Australia for their dedication and commitment during the year. Finally, let me confirm our commitment to confirming recent and ongoing growth in our live and on-demand audiences to meaningful positive returns for our shareholders this year and in years to come. I will shortly invite our CEO and Managing Director, Grant Blackley, to say a few words. However, before I do, we would like to play a short video showcasing our brands, activities and culture. [Presentation]

Thank you, Rob, and good morning, everyone. I hope that video just gives you a small snapshot of what we're enormously proud of and the vibrancy within the business and most importantly, our culture here at SCA. As each of us know, the world has changed demonstrably in the past year. The media markets in which SCA operates have been among the most affected by the lingering impacts of the pandemic and more recent geopolitical events. As Rob said, the group's financial results were disappointing and current economic conditions do remain challenging. In these circumstances, we are focused on the things that we can control to position the group to benefit from positive trends in consumption of our content as markets return to a normal state. . This includes improving the way we acquire, market, distribute and monetize our expanding library of premium broadcast and on-demand audio content. This focus includes ongoing diligent and a disciplined approach to the group's operating costs through structural adjustments, particularly by our broadcast teams as well as the reduction in discretionary costs, which may include marketing, training, travel, entertainment. We were able to partially mitigate the impact of lower than forecast revenue in the last financial year. However, at the same time, we have continued to invest in implementing a digital-first operating model for audio. We successfully completed a 5-year program to install a digital operating infrastructure across all our offices and every studio. This infrastructure enables us to create, ingest and distribute premium content from any location to audiences at any time on a device of their choice and positions us to capture the commercial value of the ever-increasing appetite of Australians for premium audio content. Completion of this program was a core driver in our mission to entertain, inform and inspire Australians anywhere anytime. Core drivers of the next phase of our corporate strategy will be to consume -- continue, I should say, to evolve our listener audio ecosystem into a unique world-class platform while optimizing and simplifying our sales offering in pursuit of higher revenues. To achieve these measures and outcomes, we will continue to embed that digital-first operating structure. A successful media company must consistently deliver large and engaged audiences to attract interest and investment from our advertising partners. The ending of COVID-19-related lockdowns late last year in Australian's major population centers, particularly Sydney and Melbourne, brought back the home to office commuting, particularly in cars, in public transport and even on foot. And to that end, we have started to see that primary driver of consumption returned to a more normalized market. As Rob mentioned, radio audiences led by entertainment and music formats, such as our own Hit network and Triple M networks have returned in record numbers. Our Sydney station on the Hit network to remains the biggest opportunity for growth in our entire portfolio. In September '21, we relaunched the station as the new Today FM with a refreshed music strategy and a female skewed format, Hughesy, Ed and Erin took their breakfast show to key communities to build engagement and encourage more trial and more listening. While this remains work in progress, the number of weekly listeners to Today FM has grown nearly 50% and since the launch or relaunch of that station. The strategy for today FM in the year ahead is directed at attracting and attaining new listeners while extending the amount of time that they spend with us in listening. Sustained growth in the audience of the breakfast show will also flow through to other segments of the daypart, including Carrie and Tommy's Drive show, which has grown its weekly national metro audience to nearly 1.8 million listeners. The Triple M network has doubled down on its local routes across the course of the year. All Triple M stations around the country now have a state-based rush hour drive show. This is differentiating us from our competition and from other parts of our portfolio like the Hit Network, who typically offer national drive shows. These state-based rush hour shows they have resonated quickly with audiences survey results of evidence, and they continue to improve over the course of the year. We're also delighted this month to announce enhanced and extended partnerships with the AFL until 2024 and the NRL until 2027. This was no surprise as Triple M has been a consistent performer and attracts the largest audience for AFL and NRL across Metro fully stations. We deliver, in fact, more than 50% more listeners than our closest commercial competitor. Triple M also returned last year to cover the international cricket, which we have until 2024. Most notably, Triple M audiences can now listen to Triple M's AFL, NRL and cricket commentary on LiSTNER. Sporting bodies have previously preserved these rights for themselves or other partners. But in actual fact, extending these rights now to LiSTNER has expanded the reach and influence of these sports to a broader fan base across Australia. We've also continued to expand the volume and diversity of live and on-demand audio content hosted on LiSTNR. The house of LiSTNER, as we describe it, now enjoys 99 radio stations, 25 music genre stations, 124 original Australian premium podcasts, live AFL, as I just mentioned, NRL and International Cricket, expert local and news and information in current affairs all around Australia and licensed content from premium domestic and international partners. We also provide extensive sales representation for many of those partners, including those global and acclaimed leaders like Wondery and Stitcher. Just for background, we released LiSTNR in February 2021 as a minimum viable product and have progressively added to the functionality and the user experience. Housing all of our live and on-demand content, original and partner content, listener has now today, and we will put out a release shortly has passed the 1 million signed in users. This success enables us to confidently close down our previous independent Hit and Triple M apps in most recent weeks, encouraging and welcoming listeners into the house of LiSTNER. Importantly, unlike other previous apps, the requirement to sign into LiSTNR means that listener is a known universe and an environment we can benefit from. Signing into LiSTNR enables users to express their audio interests and preferences using built-in artificial intelligence and machine learning, LiSTNR interprets this information and uses actual listening habits to help users find other content that may be of likely interest to them. In turn, this builds trust and loyalty across the LiSTNR. We then use this information to actually search for new content for LiSTNR and to organize the content for users in a more methodical manner. To date, we have made most of our content on LiSTNR available not only on LiSTNR but on other platforms within Australia for audio-on-demand products. And this has been done to maximize the investment we have made through reach of the content that we house for our creators and also for our advertisers. However, over time, it will be important that we -- as we grow the platform that we start to deepen the first-party data and insights available to our company to help our advertisers connect to addressable and targeted audiences at scale. The range of content we create and for which we represent a sales representation as well as the audiences that we do have we continue to diversify. LiSTNR now provides representation of 20 of the top 50 podcasts in Australian rank up enabling SCA to provide advertisers with access to large, targeted and addressable audiences importantly at scale. Our range of advertising products is expanding in tandem. For example, in August, we launched a world-first dynamic sports campaign delivering live AFL and NRL, Friday night game scores within our audio ads on broadcast and digital audio platforms. Specifically, live scores and updates delivered during Triple M 40 ad breaks. So fans know who's winning, even while the ads are playing. Enhanced audio transcription of our content also enables us to report accurately and quickly to our clients on the credits that we provide to them during those live programming broadcast. During the year, our internal division of SCA's Insights division, aptly named SCA IQ worked with amplified intelligence and Professor Karen-Nelson field. to conduct a feasibility study into broadcast audio attention to understand how live radio influences listeners and their brand choice. The feasibility study found that broadcast audio commands high attention, on par with other broadcast mediums, while SCA's suite of audio performed better than some visual counterparts. Throughout the year, though, what we also did was we passed this journey of inflammation and learnings across the commercial radio and audio, our peak industry body. And they have committed to continue to testing and develop audio retention metrics for broadcast audio and podcasting. It's more important than ever for our sales and creative teams to know the audio content we represent to understand our advertising products and to be able to explain them simply and match them to our clients' objectives successfully. Our success is very clearly defined on how we deliver success for our clients. Taking a client-centric approach, we've, therefore, created an integrated radio and digital audio sales structure. Our sales training provides detailed knowledge about all of our products including our growing suite of digital audio content and audience attribution tools. It also includes fundamental skills for effective selling, critical thinking and tools from motivating, coaching and performing as a successful team. SCA, we are very proud to be at the forefront of many industry initiatives to educate buyers about our digital audio market and improve the tools available for them to transact with us. As Chairman of Commercial, Radio and Audio, I am proud to say that we have made good progress with the official survey provider, GFK. And we are looking to evolve the commercial radio industry audience measurement currency. The currency of radio data is now collected predominantly by electronic diary and passive wearable devices with live streaming data to be incorporated in coming months. The Australian podcast rank of which we also were a founding member through the commercial radio and audio division, of which now is provided on a monthly basis, provides listeners or reach as well as downloads known as frequency to help our media buyers to plan and value their investments more so in a meaningful way across digital audio. Increasingly, content credit for broadcast is consumed by audiences on connected devices, whether live or later as a radio show podcast on snippets posted on to LiSTNR. Our radio shows build engagement and loyalty with our audiences through audio and video clips posted to social media. In fact, audio visualization is becoming increasingly important in the world of digital audio. To meet these imperatives, SCA is committed to a digital-first operating model for audio. We have made substantial progress in this direction, but work remains to optimize our workflows and our systems. Action's underway to close these gaps in our current business models include designing new workflows, performance measures, and measurement and reporting tools, while also educating and upskilling our people to ensure we have the required capabilities to educate ourselves and our clients of the benefit of digital audio advertising products. As much as it is about also educating our partners about what is leading content that we and our clients deserve and want. We are very comfortable, as Rob mentioned earlier, to be retaining our TV assets. Through the sale of capital assets and outsourcing of asset-intensive activities to specialist providers since 2017, SCA has created a streamlined, efficient and capital-light TV service. In the most recent financial year, SCA's television assets delivered EBITDA of just over $30 million, with an improved margin of 23.7%. And a market-leading revenue to audience power ratio of 1.09 in the three aggregated markets of regional Queensland, Southern New South Wales and regional Victoria. These outcomes has followed a seamless transition to affiliation with Network 10 back on the first of July 2021. SCA's provision of national sales representation services for 10 programming in Northern New South Wales, Western Australia, Tasmania, Darwin, Mildura and Riverland deliver a simple and scaled top 10 sales proposition for national buys of advertising across network 10 and their regional footprint. Television is also a very valuable and strong marketing platform to grow awareness in the number of users on our LiSTNR platform across regional Australia. Our television business, in fact, delivered circa $10 million in in-kind support in our marketing effort to grow that strategic initiative. Turning to executive leadership changes. During the year, I was pleased to promote, and I welcome Rebecca Ackland to our executive leadership team as our Chief People and Culture Officer. Rebecca joined our people and culture team 4 years ago and has progressively and rapidly turned from an operational human resources responsibility to designing and implementing initiatives to ensure SCA's agile, skilled and culturally as diverse as possible in our marketplace. Rebecca does bring a fresh perspective to the leadership team and is a role model for other aspiring women within SCA and within the industry. After 8 years, we have also farewelled Nick McKechnie as our Chief Financial Officer. On behalf of SCA, I wish Nick every success in his new role. I'm pleased to report we have identified a highly skilled and experienced executive to take over this very important role within the leadership team, and I'll be pleased to announce that before the end of this month. I'd now like to turn to a trading update and particularly focused on the first 4 months of the fiscal year being July through October. Audio markets -- audio advertising markets have recovered this calendar year after Sydney and Melbourne emerged from the most recent lockdowns. The recovery has been led by national advertisers with the local advertisers strengthening in recent times. Our broadcast audio revenues in the first 4 months of this fiscal year have improved by 7% against the prior comparative period. Television markets recovered more quickly than other markets during 2021 and have generally contracted this year. SCA's Television revenues for the first 4 months of this fiscal year are down by 6%, and respecting that television is cycling over a stronger period this time last year. Digital audio markets, on the other hand, are growing strongly with the number of advertisers and the volume per campaign rising. We expect these trends to continue as advertisers acknowledge the scale, the diversity of content and the incremental reach that we can provide with those 1 million signed-in users on LiSTNR. We have recently announced our exclusive sales representation of the world-acclaimed Stitcher and Wondery podcast libraries, which has meaningfully strengthened our proposition to advertisers and the users of LiSTNR. As a testament to the growth in digital audio, SCA's digital audio revenues for July to October have grown by 40% compared with the same time last year. Regarding our cost base, our management team continues to take a highly disciplined approach to limit cost growth despite inflationary pressures. As we said when we released our results in August, we expect non-revenue-related costs for the full financial year to grow between 2% and 4%. Finally, I would like to confirm that we do have a strong balance sheet, modest gearing and consistent free cash flow generation that will enable us to continue on market buyback. To date, we have expended $13 million to buy back just over 4% of issued capital. At the current prices, we believe the buyback is effective use of capital to enhance shareholder returns. In conclusion, we are enormously proud of the culture that we have built at SCA that encourages inclusion, diversity, agility and collaboration. Our people are highly skilled, they are passionate and they are curious by nature. They are dedicated to their local communities. And this was and is being exemplified during the year. As Rob mentioned, from our teams in Queensland and New South Wales, and more currently in Victoria, keeping community safe, informed as floods wreck through and damage, both at a physical and emotional level in those particular communities. Broadcast radio is an essential service, and our business continuity arrangements keep us on air when many communities and emergency service providers need us most. At the same time, we continue to support thousands of small- and medium-sized clients struggling to overcome these events, along with ongoing supply chain disruptions and of course, labor shortages. Our teams are passionate engaged and effective. And we're going to continue to work hard in the year ahead to improve the pace of recovery and adapt to the changing and increasing consumption of our content anytime and anywhere or with the ultimate focus of building value for you, our shareholders. Thank you.

We will now move to a discussion of the formal items of business set out in the Notice of Meeting. The notice of meeting has been made available to all shareholders and is also available on SCA's website. The explanatory notes in the notice of meeting explain the background to each of the items of business. Shareholders have had an opportunity to consider those matters, and I will take the notice of meeting as read. However, I do want to make a few comments on today's director elections and succession planning. As I've said earlier, Helen Nash and I are standing for reelection by shareholders today. The notice of meeting outlines the Board's recommendation for shareholders to vote in favor of our reelection. Helen continues to make a valuable contribution to SCA. She has been Chair of the Board's People and Culture Committee since 2017. If she is reelected today and as part of the Board's succession planning, Helen will stand down as Chair of that committee in favor of Heath Mackay-Cruise. Helen will continue as a member of both the People and Culture Committee and the Audit and Risk Committee. I'll shortly ask Helen to make a short statement confirming her interest in the company and how she will contribute to its future success. But first, let me say a few words about my own interest in continuing as Chair of SCA. Most of our shareholders will know that I have been a Non-Executive Director of SCA for 8 years and the last 2 years as Chair at SCA. In that time, I have to say, like -- unlike any other business I've been involved in this business has been changed fundamentally by massive changes in technology. We live in the middle of what has been an incredible technological revolution, and this business has been profoundly impacted by that. That has meant we now compete with a completely different competitive set where we used to talk about our local radio and TV broadcast competitors, we now talk about global technology competitors. We've also seen enormous market and external shocks. And you see that with obviously the pandemic, but we also see that with some of the things going on in the world today. For all of that period, I have to say that's been a time where as direct as you reflect on your motivation for doing these jobs. My motivation, you may be surprised to know is not the extrinsic one being brutely candid, I don't think you get paid enough for the risks we take. And it isn't worth it. I do it for the intrinsic reasons of the fact that I actually want to try and make a difference to the business I work with. And I want to try and make a difference for the shareholders who have chosen to invest in that business. And it's with that hat on, that I ask the shareholders for reelection today. I am proud to say that I believe this business has adapted to the seismic challenges that we faced, and I think has a strategy that will deliver and rebuild shareholder value in the future. And I want to stay in the role of chairing this business and the ASX listing rules and any proxy votes required to be excluded by those requirements have been excluded from the numbers on the screen. The next slide shows the valid proxy votes received before the meeting for each item of business. As shareholders are aware, there is no requirement for a vote in relation to the adoption of the financial report, although we, of course, welcome any questions. This slide will stay up for the remainder of the meeting. You will see there is healthy support for all resolutions. While there might still be some boats to come in today, I thank shareholders for their support to date, and in particular, Helen on her reelection as a director.

Turning now to questions. Are there any questions from shareholders in the room today? It appears that's not the case. I'm now going to ask Rochelle Burbury, our Corporate Communications and IR Director to let me know whether we've received any additional tax questions during the meeting and whether any shareholders wish to ask a verbal question.

Yes, we do have some questions. The first question is -- I'm going to group two together from shareholder, Mr. Stephen Mayne. His questions are, we are broadcasting Sky News into regional Australia on free-to-air. Sky News is the largest source of climate denialism in Australia. What standards do we have in terms of the type of content we're happy to carry from Sky News? Is there a line to be drawn in terms of spreading anti-science propaganda when as a company, we remain committed to climate action? And the second part of that question is, how long is our broadcasting agreement with Sky News, and has it been profitable for the company? What proportion of the advertising revenue do we get?

If I may ask, particularly on the latter part of that question for Grant to comment on that.

Certainly. Thank you for your question, Mr. Mayne. First and foremost, we take our obligations to the standards and conduct of and regulation put forward by the ACMA and governing bodies in relation to the type of content that is broadcast. And certainly, in the case of Sky News, to my knowledge, they have not been formally investigated on any matter over a number of years, although there has been media discussion about the content. We are very comfortable with the product that comes from Sky News, and we do think that it actually operates as a good source of information, both on immediate and domestic and international affairs throughout our regional communities. The deal does expire around June 2024. And I can confirm that, that is a profitable commercial arrangement that we have with Sky News.

We do have another question from Mr. Stephen Mayne. Is it appropriate for us to be paying the current Lord Mayor of Perth, Basil Zempilas, to deliver a breakfast program on Triple M Perth? Isn't this a conflict of interest and breach of the idea that media should remain independent of politics? Would we pay a Premier or Prime Minister to have their own radio show, where do we draw the line on this issue?

Thank you again for your question. Interesting enough, we actually had contracted Mr. Zempilas, actually before he became Lord Mayor of Perth. And to that end, yes, we do take our obligations here. We do believe that our conduct is appropriate. He actually has a media life with others outside of SCA, most notably the 7 Network that he appears on as well albeit there is some changes in his lifestyle in the manner in which he will commit himself moving forward. But we certainly go into these commercial arrangements with an eyes wide open approach. I'll actually confirm more so that he actually has finished, Mr. Mayne in Perth at this point in time, which was announced in most recent weeks.

And we have another question from Mr. Mayne. There was a recent media blow up over one of our Triple M football commentators, Wayne Carey after an incident at Crown Perth. What is the latest update on this situation?