ARN Media Ltd (ASX:A1N) has revealed the financial cost of the collapse of the Kyle and Jackie ‘O’ breakfast show, with first-half revenue falling 14% to $127.9 million as advertiser concerns weighed heavily on its flagship KIIS network.
The high-profile breakdown has also been a major influence on ARN’s share price this year. Shares jumped 5.8% in early trading on March 4 after Jackie Henderson said she could no longer work with Kyle Sandilands, as investors initially welcomed the prospect of change at the troubled program.
ARN subsequently terminated Sandilands’ contract, while Henderson also departed, triggering legal disputes with both presenters.
The company’s underlying EBITDA for the six months to June 30 fell 27% to $18.2 million, with ARN attributing the revenue decline partly to a reduced share of metropolitan radio advertising caused by “brand safety concerns associated with KIIS breakfast”.
Cost base reset
Chair Hamish McLennan said the first-half result was “not where we want ARN to be” but argued that management had made the decisions needed to change the company’s trajectory and reset its cost base.
ARN reached a $12.09 million settlement with Sandilands in June, ending his legal action, while Henderson is continuing proceedings against the company.
The broadcaster is now seeking to rebuild advertiser confidence while simplifying its portfolio, reducing costs and strengthening its balance sheet.