ARN revenue drop hits salaries of Kyle Sandilands, Jackie ‘O’ Henderson and Christian O’Connell
Radio stars Kyle Sandilands, Jackie ‘O’ Henderson and Christian O’Connell will miss out on bonus payments after ARN reported a 23 per cent drop in earnings.
A drop in revenue and profits for ARN’s KIIS and Gold radio brands has impacted the salaries of the stars.
Speaking to The Australian after delivering ARN’s first half earnings late last week, the company’s chief executive Ciaran Davis said high-profile on-air talent, including KIIS duo Kyle Sandilands and Jackie ‘O’ Henderson, and Gold’s Christian O’Connell, would be affected by the less-than-stellar balance sheet.
The presenters’ salaries are linked to revenue share arrangements designed to reward ratings success, but they are only triggered if incremental annual station revenue growth is achieved.
With ARN reporting a drop in metro radio revenue in its first half results, the stars’ pay packets will be missing payments linked to growth.
Mr Davis wouldn’t detail how much the stars might be impacted. “If the company does really well, then they’ll do well,” he explained. “If it’s not so good, then they won’t enjoy the same rewards they might have got.”
The base salaries are more than generous, and in addition, the three hosts were given a sign-on bonus of 7.5 million shares split between them. They can’t be sold, though, until the end of their contract terms – 2034 for Sandilands and Henderson, and 2029 for O’Connell.
The four listed radio broadcasters revealed varying results when they reported last week. Overall revenue at ARN was down 7 per cent with Nine also dipping, but by just 2 per cent. SCA and niche broadcaster Sports Entertainment Network (SEN) both grew revenue in FY25.
ARN was the odd one out when it came to earnings. It suffered a 23 per cent drop in EBITDA (earnings before interest, taxes, depreciation and amortisation) compared to the result in its first half in 2024.
Other radio players painted a rosier picture. SEN was the star performer with full year EBITDA up 54 per cent, SCA climbed 34 per cent and Nine lifted 8 per cent.
Despite the challenges facing ARN, Mr Davis was upbeat. “We’re not too far behind (the others),” he said.
He said the company’s result was “outstanding – when you consider that we have totally restructured the commercial team this year”.
Nine’s former chief commercial officer Michael Stephenson began as ARN’s chief operating officer in April, bringing former Nine colleague Richard Hunwick with him to lead sales.
One challenge for the new advertising team is juggling clients who have pulled back from The Kyle and Jackie O Show over content concerns.
Mr Davis acknowledged that different clients choose different programs to partner. “There’s clients who like products across our portfolio and there’s other talent that clients don’t (like). And we’ve had that all the time.”
He bristled when it was suggested the raunchy talk on the KIIS breakfast show at 6am each day had been dialled down to please advertisers. “That is not the case at all. The show constantly evolves based on feedback from listeners and advertisers and it’s happening daily,” Mr Davis said.
“We’re constantly looking at what we need to do and taking feedback not just from advertisers, but also audiences as well. That’s something that Kyle and Jackie do themselves too. There wasn’t a definite moment in time where we said, ‘Let’s change the show’.”
ARN has shed 240 staff during its ongoing restructure. Asked if the savings were helping pay the bigger network salaries of Sandilands, Henderson, O’Connell and soon-to-be drive hosts Brendan Jones and Amanda Keller, Mr Davis said: “Going through a restructuring process like this is difficult and unsettling for everybody. What we are doing is investing in the key areas of growth for this business, which is in the creation of content.”
In addition to growing its digital brand iHeartRadio, ARN is focused on two broadcast brands – KIIS and Gold.
The original plan for networked national stations was to include KIIS and Triple M. However, when the deal to acquire Triple M from SCA fell over, ARN looked to a national rollout of Gold.
It was wrong to call the Gold rollout Plan B, Mr Davis said.
“We’ve always had a view that Gold nationally would be something we could do,” he said.
As to any future moves on attractive assets owned by SCA or others, Mr Davis noted: “We’re very strong in our view on the need for consolidation of media within Australia. Unfortunately, we’re operating in an uneven regulatory environment where global tech companies continue to take an unfair share of advertising, are not regulated from a content perspective, employ very few salespeople and don’t pay tax.
“We’re strong believers in consolidation. We still hold our 15 per cent in SCA and we’ll continue to review that and we’re delighted that they’re paying a dividend.”
That SCA dividend flowing to ARN has climbed from 1 cent per share to 4c year-on-year.
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