The media industry is facing a major financial crisis these days. Many news channels are considering shutting down and many are going through issues like cross-cutting and payment delays.
This is naturally because of the overall downfall of the economy of Pakistan. The value of rupee is going down day by day which is resulting in crises of advertisement industry which in turn affects the media industry which works in the circle with advertisements.
Another reason for the crisis is the political imbalance between the government officials and media which results in banning and closure of many media channels for even several months sometimes.
Especially in case of Geo network that is facing major set back and criticism since years now. Because of the continuous ban of the channel the company had to overcome the crisis through commercial loans to fill the gap.
In the recent letter to the employs of GEO network, the board of directors mentioned his concerns about the downfall of the channel and yet its efforts to grow. The letter says, “Compared to 2013, GEO News average monthly revenue dropped more than 33%. Since then net costs meanwhile have risen up by 50% both due to competition in salary by noncommercial entities who had funding from illegal/other sources, the falling rupee dollar parity and the additional costs of debt servicing against the commercial loans that the Network has continued to avail due to the repeated closure of the channels since 2013.”
This crisis has resulted in a decreased percentage of revenues in comparison with the earning of the company. Due to which the company is unable to maintain its stability and unable to give pays to the employs on time.
The letter said that the company is left with only limited assets and funding.
“Billions of rs of loans have been taken not for funding new projects, channels, property but to pay for salary and to help the team members not lose their jobs.”
This strategy of taking loans to run the channel which is already in crises is probably the major reason for the downfall of the company . The government advertisement didn’t proved to be enough for the revenue. This is the bad news for the employs who have been waiting for the sustainability of the Geo network. The letter mentioned as follows.
“With the aim to eliminate the gap between revenues and expenses and to be able to pay the salaries on time, we have decided to take a number of steps in terms of staff and overheads. This would mean that, with a heavy heart, we will need to say goodbye to some of our colleagues and undertake pay cuts for the rest. ”
However, the policy of the company seems to take a very risky turn of cutting down the salaries of those who have salaries more than 4 lac per month.
” Therefore, effective immediately, we are reducing by 20% the salaries for all employees earning more than Rs 4 lacks per month. This salary reduction is across the board starting from the Chief Executive and Managing Director, Senior Anchors and continuing down the line. 10% salary reduction is being done on all team members whose salary is from 110k to 400k per month. No salary reduction is being done on team members that are earning below 110k per month.”
The letter has also shown some hope of progressing with time by adopting these strategies.
Now we have to see if the coming months will turn out to be in the best interest of the media industry or not.