Karl Stefanovic canvassed to replace Kyle Sandilands after his bust-up with Jackie O

There were talks of Karl Stefanovic replacing Kyle Sandilands after his on-air bust-up with Jackie O was branded as “serious bullying” and “not OK” by radio giant ARN, a court has been told.

The new claims come after court documents alleged Ms Henderson hired exorcists to clear Mr Sandilands’ “demons” after she made a bullying complaint against her co-host the year prior.

Both shock jocks had their 10-year contracts torn up in the wake of an on-air clash in February during which Mr Sandilands told Ms Henderson she was “off with the fairies” while criticising her interest in astrology.

Ms Henderson alleges in her Federal Court lawsuit against ARN and its subsidiary the Commonwealth Broadcasting Corporation (CBC) that she was unlawfully sacked following the bust-up after she expressed she could no longer work with her co-host on the Kyle and Jackie O Show at KIIS FM.

The radio company is defending the claim, arguing that Ms Henderson’s bullying claim was not made in line with workplace law.

Emails read aloud during a hearing in the Federal Court on Friday reveal an ARN higher-up called the bust-up “not OK” and said there was “serious bullying and harassment in the workplace” as the program was still live on air.

“Worth us grouping to discuss … concerning that no one stepped in and stopped (it) sooner,” the email allegedly read.

When Ms Henderson’s manager reached out later that morning to discuss how Mr Sandilands had allegedly “bullied” her client, internal emails between ARN executives allegedly stated they needed to “be careful from a legal liability perspective how we respond”.

A draft response allegedly said the company was taking the incident “extremely seriously”, but barrister Vanja Bulut claimed that ARN chief executive Michael Stephenson had recommended the word “extremely” be removed.

When it became clear that Ms Henderson would not be returning to the Kyle and Jackie O Show, ARN allegedly canvassed the possibility of having controversial media personality Karl Stefanovic step in to co-host a breakfast program with her, Ms Bulut told the court on Friday.

However Ms Henderson was instead offered a spot on an afternoon show with a $2m annual contract that she refused, the court was told, with Ms Bulut calling it a “bad offer”.

Court documents released earlier this week claim Ms Henderson arranged for exorcists to clear Mr Sandilands’ “demons” after she made a complaint about him in September 2025.

ARN and CBC say she withdrew the complaint because she believed the issue had been “resolved” following the spiritual intervention in an interlocutory application filed this week alleging this was not a “rational” basis for telling the company no further action was required regarding the complaint.

Alternatively, ARN says the complaint may have been withdrawn because Ms Henderson still had concerns about her co-host’s behaviour but did not want to say anything, in which case she “knew about the risk but still told ARN that no further action was required”.