Revealed: Full cost of Kyle and Jackie-O’s legal battle

Kyle Sandilands and Jackie ‘O’ Henderson’s months-long legal battle against their former employer ARN has cost the radio company more than $17 million so far as it battles rapidly declining revenue and profits.

ARN Media revealed the figure, which is bound to increase when it meets Henderson in the Federal Court in October to fight her $82 million contract claim , in its half-year results on Friday. The company posted a loss of $28.3 million for the half year. Revenue was also down, declining by 14 per cent to $128 million.

The company put the revenue shortfall down to “brand safety concerns” associated with the now-defunct Kyle and Jackie O Show and a lack of federal election advertising revenue, which propped up results in the same half last year.

The $17.2 million figure for its legal expenditure included Sandilands’ $12 million settlement agreed in June. ARN will suspend dividends until its outstanding legal dispute with Henderson is resolved.

ARN chief executive Michael Stephenson said the company has made “strong progress” in stabilising its core business and strengthening its financial position, both by settling its matter with Sandilands and agreeing to sell its Hong Kong based outdoor advertising business Cody.

“These actions provide greater certainty for shareholders and create the operating and financial flexibility required to execute our strategy,” Stephenson said.

Stephenson and chair Hamish McLennan are under pressure from shareholders, after suffering a 90 per cent protest vote against the proposed remuneration package for executives in May.

Actions taken by ARN over the past 18 months have established a “stronger foundation for improved performance and long-term shareholder value”, McLennan said.

“While the first half result is not where we want ARN to be, the board is clear that the decisions being made now are the right decisions to change the trajectory of the company,” he said.

McLennan green-lit a 10-year, $200 million contract to keep The Kyle and Jackie O Show on KIIS FM in 2023. But earlier this year, the show blew up. Poor ratings in Melbourne, action from the media watchdog and an advertiser boycott, combined with a deteriorating on-air relationship between Henderson and Sandilands, resulted in an on-air feud in February this year.

Henderson walked off the show and did not return. After informing ARN she could no longer work with her co-host, her contract was terminated. She is now suing the network, alleging it failed to protect her from Henderson and improperly tore up her contract with $82 million left owing over several years.

ARN also terminated Sandilands’ contract for allegedly bullying Henderson, which he denied .

After settling the lawsuit, Sandilands told this masthead that ARN was a “house of cards”. Hundreds of staff have been made redundant and its share price has fallen about 44 per cent over the last twelve months to 26 cents.

“I don’t regret saying the comments to Jackie because it needed to be said,” Sandilands previously said. “If it brought on an early exit from the show and the implosion of that show, then that’s unfortunate.