Alan Jones advertising boycott likely to cost $1 million

Nine Entertainment Co could potentially renegotiate its $114 million takeover bid for Macquarie Media if the radio business suffered a significant earnings hit amid a sponsor boycott against star broadcaster Alan Jones and a weaker advertising market.

Nine, which owns this masthead and has a 54.4 per cent stake in Macquarie, made a conditional offer in August to buy the rest of the radio network.

2GB presenter Alan Jones.

A bidder statement from Nine released to the ASX on Friday explains that one of the conditions is "no adverse material change" such as an ongoing reduction to the annual underlying consolidated earnings (before interest, tax, depreciation and amortisation) at the network of $3 million or more.

About 80 advertisers, including big companies like Coles, have since publicly distanced themselves from the 2GB Breakfast Show following comments made by Mr Jones that New Zealand Prime Minister Jacinda Ardern should have a "sock [shoved] down her throat".

Some brands have ended current campaigns, decided not to advertise on the show in the future or removed ads from the network altogether.

Macquarie generated $27.1 million in underlying earnings in the 2019 financial year on $131.8 million in revenue.

Mr Jones has a $4 million salary as part of a recently-signed two-year contract and Nine chief executive Hugh Marks recently described the shock jock as being worth "10 per cent" of Macquarie's revenues.

A 2GB source said the latest ad boycott was the "worst ever" for Mr Jones' show, adding that while in the past advertisers had resumed spending once the backlash quietened down there is now growing pressure from social media groups Mad F--king Witches and Sleeping Giants Australia discouraging brands from returning.

It's not clear how much revenue has been lost due to the boycott so far but one source close to 2GB estimated it could be as much as $1 million, and said while new contracts might be able to fill the ad spots the current weak advertising market was exacerbating the problem. Macquarie Media declined to comment about the size of the potential loss.

Advertising spots on Mr Jones' show typically command a premium price. The breakfast show won the latest ratings for May 26 to June 29, capturing 17.1 per cent of audience share for the 5.30am to 9am timeslot. Overall, 2GB had a 13.4 per cent audience share, down 0.6 per cent.

Mr Jones was previously the subject of a boycott that resulted in the loss of several millions of dollars in ad revenue after he said in a speech in September 2012 that then-Prime Minister Julia Gillard's father had "died of shame" because he had "a daughter who told lies".

In Macquarie Media's 2013 annual report the network's executive chairman Russell Tate pointed to a "very significant hit to our revenues in the second quarter after comments made at a private function by Alan Jones resulted in a massive social media campaign against Jones and 2GB, and directed specifically at forcing advertisers to withdraw their support for the station".

"We were forced to suspend all advertising in Alan Jones' Breakfast Show for a short period and estimate the full year revenue impact of this episode to have been between $3 to $4 million."

Underlying earnings fell 25 per cent to $11.3 million over that year, with the result also affected by lower than expected revenues from London Olympic broadcasts and a slower radio market.

The suspension was in place for a little over a week and when it was lifted some advertisers did not return.

Nine declined to comment.