ARN Media (ASX:ARN): Its 10-year $200m deal with Kyle & Jackie O has turned out to be a disaster

If there’s one company facing scrutiny from investors over one bad deal, it’d be ARN Media (ASX:ARN). No company signs a deal unless they think it’ll be good. And securing Kyle and Jackie O…what was there to lose? Yes there are haters, but haters are going to hate, right? Well, eventually the haters caught up, and ARN should count its lucky stars it never had to face Carl Levin…

…or his Australian equivalent. Just look at ARN’s share price…down 50% in 2 years when the deal was signed? Coincidence? We wouldn’t think so.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

About ARN Media

ARN stands for Australian Radio Network but it has been known by several names in its history including Here, There & Everywhere. It is primarily a radio network, but also has an out of home advertising business. Its networks include the Kiis network as well as iHeartRadio (it has the exclusive Australian license).

ARN uses the calendar year and it made revenue of A$365.6m, up 9%, EBITDA of $93.1m pre-significant items and a profit pre-significant items of $12m, but $3.9m including significant items.

At these results, the company unveiled a 3-year transformation program to reduce $40m in cost (20% of the cash base). The program would include a reduction in staff, replacing underperforming or expensive programs with cost-effective alternatives, and reviewing. all supplier arrangements and discretionary spending. But honestly, if there’s one are where there needs to be restructuring its the deal with Kyle and Jackie O.

The deal with Kyle & Jackie O that hasn’t worked out so well for ARN Media

Kyle Sandilands and Jackie ‘O’ Henderson have a 10-year deal through to the end of 2034 that is reportedly worth $200m. Much of the details are confidential, but given ARN Media told the ASX their base fees would increase by A$2-3m per year from January 2025, one has to assume the deal is more heavily weighted to the back end. Even if it was equally spread, it would be $20m a year.

The theory behind the deal made a lot of sense: Kyle & Jackie O are big personalities with strong ratings, and expanding into Melbourne (which this deal provided for) seemed like a way to significantly grow ARN’s breakfast audience and ad revenue. And of course, a rival network could have picked them up. Remember that they were poached from the 2Day network as it then was.

However, the execution is not going smoothly: the pair’s Melbourne launch hasn’t delivered strong ratings and is costing ARN ad revenue. The show has not only failed to gain new listeners, but even lost listeners it had. Even Ciaran Davis, who signed off on the contract, described the launch as an ‘unmitigated disaster’. Many would know that Sandilands is one who says what he thinks without concern to what others may think.

For years, it was only Sydney listeners that had the power and so the whingers got nowhere. But in progressive Melbourne, it is a different market. An activist social media group called the ‘Mad F***ing witches’ (named after a lewd comment of Peter Dutton during his time in government) that pressures advertisers to withdraw, and they’ve done so successfully.

But beyond activist pressure, media regulators (especially the ACMA) have intervened multiple times. We won’t give some of the lewdest comments any more oxygen, but let’s just say that regulators have demanded that Kiis should ensure the duo would not air segments ‘highly offensive to an ordinary reasonable listener or which contains strong and explicit sexual references’.

Don’t take our word for it

The most recent update from ARN Media came in earlier this month when it revealed interim results for the 9 months of 2025 where revenues were down 10% and its bottom line 27% weaker. The words used were ‘cautious client sentiment’ and that’s true, but it is difficult to say any other presenters can be scapegoated as much as Kyle and Jackie O. Yes radio and audio is much more competitive with the podcasting space, but rival Southern Cross reported 5% growth in revenues during Q1 of FY26 and earnings were set to more than double.

This has left investors wondering if they can get out of the deal. Not just get the pair off the air, but to do so without owing them the full amount. It remains to be seen if repeated breaches would make it so, or if either or both walked away of their own accord. But ironically, if the deal is torn up, the company still faces questions of how it could enter into such a deal, and how it could rebuild its reputation?

ARN clearly has a big dilemma in front of it.