An epochal day in Australian radio as ARN locks in Sandilands and Henderson for another 11 years, and Christian O’Connell for five more
Welcome to a midweek update from Unmade, written the morning after Compass came to Melbourne.
Today: ARN locks in its key talent in one of the longest and biggest deals in media history.
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Locked in: ARN tightens its grip on the audio market
Tim Burrowes writes:
Hamish McLennan has had a helluva busy start to the week.
On Sunday night he lost his gig as chairman of Rugby Australia. Today he secured the employment prospects of three other people. Kyle Sandilands, Jackie Henderson and Christian O’Connell have all been locked into long term radio contracts with ARN Media, one of McLennan’s other chairmanships.
The announcement went onto the ASX this morning. The Kyle & Jackie O Show is now contracted to ARN for another 11 years, all the way through to December 31, 2034. The new ten year deal which kicks off at the start of 2025 must be the longest Australian talent contract of all time.
Sandilands will be 63 when it ends, Henderson 58.
That’s ironic, considering the reason the duo left Southern Cross Austereo’s 2Day FM a decade ago was because the management weren’t sure they had more than a year or two left at the top. Not one to forgive and forget such things, this morning’s on air announcement from Sandilands included this: “Ten years ago the ‘other’ network we were once at told Jackie and I that we were past our used-by date and no longer relevant. So that’s a fun little observation that’s worth mentioning on such a momentous day.” Ouch.
Sandilands has also got his long term ambition of going live into Melbourne as well as Sydney. That will cost his friend (or possibly former friend) Jason Hawkins and co-presenter Lauren Phillips their jobs on Kiis Melbourne. That’s tough considering they were pulling in a respectable 8% share in the Melbourne market and attracting a weekly cumulative audience of 587,000.
ARN will be aiming to grow those numbers to the sort of audience The Kyle & Jackie O Show is pulling in in Sydney – a 16.3% share and cume of 797,000.
Almost as important for the company’s long term plans is the extension of Christian O’Connell’s contract for another five years. O’Connell’s show on ARN’s second network Gold is number one in FM in Melbourne’s breakfast slot with a share of 11.5% and a cume of 605,000.
At first glance, it looks like Sandilands and Henderson have not quite achieved the $200m deal they were looking for
How Unmade analysed the negotiations in September:
Full details haven’t been disclosed.
The ASX announcement reveals that the company is issuing $7m in ARN Media shares to the trio (I read that as in total, rather than $7m each).
That’s nowhere near as much as I’d expected. Most of the deal comes in cold, hard cash.
That’ll cost ARN up to an extra $3m per year in salaries, plus extra bonuses based on delivering audience and revenues.
ARN is going to have an expensive couple of years – with a big marketing spend in Melbourne to promote the Kyle & Jackie O Show. That’s on top of the capital expenditure of digitising the former Grant Broadcasters operation, and the move into new North Sydney headquarters
Nonetheless, it’s a playbook CEO Ciaran Davis has successfully worked to before. When he masterminded the switch of Henderson and Sandilands to launch Kiis, his gamble was not just on their salaries but on the huge marketing spend needed to do so. On that occasion $5m, if I remember rightly.
‘Get Kyle’: Hear the story of how ARN poached The Kyle & Jackie O Show
This all plays out against the backdrop of ARN Media’s ongoing takeover bid for Southern Cross Austereo. If it succeeds, ARN will keep Kiis and take SCA’s Triple M network. Bid partner Anchorage Capital Partners will get SCA’s Hit network and ARN’s Gold network.
If that occurs, there’s already speculation that Christian O’Connell’s show would move over to Triple M to keep him in the ARN family. The fact that his deal includes ARN shares sends a strong signal that this is the plan.
As a side issue, it’s intriguing that Amanda Keller and Brendan Jones, the long time stalwarts of Gold in Sydney, didn’t get a mention in today’s announcement (they’re currently one year into a three year deal).
Although the deal locks in more cost for ARN, it also locks in more certainty – or as much certainty as it’s possible in a rapidly changing media landscape. Markets like certainty. I suspect this increases the chances of ARN’s SCA takeover succeeding.
Unmade Index slips again
Seja Al Zaidi writes:
The Unmade Index dipped another 0.27% yesterday to finish at 604.3 points.
Seven West Media has the most significant drop in share price – 3.92% – while ARN Media followed with a 1.59% drop.Southern Cross Austereo dropped 0.49% and Enero Group 0.30%.
On the flipside, Sports Entertainment Group, owner of SEN, rose 7.14%, IVE Group 0.48% and Ooh Media 0.36%.
Time to leave you to your Wednesday.
We’ll be back tomorrow with an audio-led edition of Unmade, examining Seven West Media’s new community sports initiative Streamer.
Have a great day.
Toodlepip…
Tim Burrowes
Publisher – Unmade
tim@unmade.media
