'Tied at the hip': Here's what Kyle Sandilands and ARN's settlement actually means

Following Wednesday morning’s blockbuster $12.09 million settlement between Kyle Sandilands and ARN, we’re breaking down exactly what the massive payout means for the radio king and his former employer. 

The settlement paints the picture of an amicable split, with a deal that will see Sandilands and ARN connected for years to come – even though he’ll no longer work for the network.

“It’s interesting that after such heated litigation, that the parties retained sufficient good faith between them to continue to be in business together,” Nick Duggal, a partner at Moray & Agnew Lawyers, told nine.com.au.

Sandilands had been seeking $85m, alleging he was wrongfully terminated from his $100 million contract following the February demise of his Kyle & Jackie O KIIS FM breakfast show with Jackie ‘O’ Henderson, but settled for a much smaller sum.

In a statement to the market on Wednesday morning, ARN said it had agreed to pay Sandilands a settlement sum of $12.09 million, with $3 million of the package payable in July 2026 and the balance payable monthly until June 2029.

ARN will also take a 19.9 per cent revenue cut of whatever the shock jock does next.

It appears each party has walked away with some wins – with Sandilands free to pursue other ventures, though not with ARN’s direct competitors until March 2027, while ARN gets a slice of the pie.

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Here’s what it actually means for everyone involved.

What Kyle Sandilands gets out of the settlement

Sandilands can finally get back to work, although not in commercial radio.

It’s clear he has plans to do so in the near future, as he told ARN he “intends to pursue independent media opportunities.”

In his first comments since the settlement, Sandilands reportedly told Craig Bruce from the Game Changers Radio podcast his next move was inspired by a discussion over a napkin on the show.

The napkin had a rough draft of how much the breakfast radio king could make if he turned to podcasting.

Bruce noted Sandilands was “in the process of finalising” his next plans, though what they actually look like remains to be seen.

Entertainment reporter Peter Ford, a regular on Australian radio, told nine.com.au that this was likely to key reason for Sandilands settling, suggesting he would be desperate to get back behind a microphone.

“He’s like Dracula needing blood, he needs to be working,” Ford said.

Whatever Sandilands’ next move is will get an instant boost from negotiated “advertising services on ARN’s partner platforms” to the value of $1.5m over the next three years.

Plus, Sandilands will still receive payments from his former employer over that same time period.

While it’s a far cry from his now-terminated $100m contract and the $85m he was demanding in his lawsuit, Sandilands will receive $3m this July and then an additional $9m in the form of monthly payments until June 2029.

What ARN gets out of the settlement

It’s not just ads and monthly payments keeping ARN and Sandilands together – the media company will also take an impressive chunk of Sandilands’ next project.

Sandilands agreed to hand ARN a 19.9 per cent cut of revenue from whatever his next move is for a period of up to three years from commencement.

This is subject to agreed thresholds and caps.

The deal has barred the former king of breakfast radio from appearing on any of KIIS FM’s radio competitors for nine months, until March 2027, while also making clear the company would no longer work with him directly.

“Mr Sandilands and his related entities will not be providing services to ARN in any capacity going forward,” the statement to market said.

Lawyer Fay Calderone told Today ”commercial heads have prevailed” in the deal, which managed cashflow for publicly traded ARN by paying out Sandilands’ settlement money in monthly increments.

A lawyer’s response to the settlement

Nick Duggal, from Moray & Agnew Lawyers told nine.com.au that Sandilands and ARN remain very much commercially “tied at the hip”.

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While on its face, “the cash settlement seemed to be a good deal for ARN”, relative to the sum Sandilands was seeking, Duggal saw plenty of benefit for Sandilands too.

“Kyle was desperate to get back on the air, and probably felt his currency was diminishing the longer he was off-air,” Duggal said.

“A quick settlement rather than drawn out trial therefore had a substantial commercial and personal benefit for him.”

Duggal believed that it would be difficult to accurately estimate what Sandilands’ actual losses would be over the life of his ARN agreement, leading to “a substantial discount on the overall potential value of the claim”.

“Looking at Kyle’s next venture, it’s interesting that the substantial returns for media personalities are increasingly in independent media,” Duggal said.

He believed both would be happy with the deal.

“When you look at the announced terms in totality, one can see how they could be portrayed as a ‘win win’ for both parties,” he said.

A radio expert’s response to the settlement

Ford too believed both ARN and Sandilands should walk away from the settlement satisfied.

He felt ARN’s statement was “very much about closing down fears and speculation” for shareholders.

“I think what they wanted very clearly to do was to say, with regard to Kyle Sandilands, it is over ... it’s under control, we know what we’re dealing with,” he said.

Ford believed the non-compete clause, which meant Sandilands could not appear on radio for nine months, was fairly irrelevant.

“I don’t think any other network will touch him with a barge pole,” Ford said, adding that Sandilands would know that.

“I think he wants to put his efforts into his new podcast project anyway,” Ford said. “He knows the game very well and he knows at the moment, nobody else would want to pick him up.”

Moving to a podcast would free Sandilands from many constraints of commercial radio, which landed him in plenty of controversies over the years.

“Kyle is now completely free to say and do whatever he wants. This is the joy of doing a podcast situation, you aren’t in any way being held back from the style of presentation you want to do,” Ford said.

“We can only imagine what that’s going to be like. He’s certainly obviously tested the boundaries before, so now there won’t be any boundaries to be tested. He can go and do what he wants.”

What did surprise Ford was ARN’s cut of revenue for his future work.

“I thought the idea was to cut ties with him, but they haven’t really ... they’re not using the word partnership, but they are still in an arrangement with Kyle,” he said.

What about Jackie O’s lawsuit?

Sandilands and ARN’s settlement avoids one blockbuster court case, however, it’s only one half of the company’s legal headache.

His former co-host is pursuing compensation of at least $82.25m, alleging her termination was against the Fair Work Act.

ARN confirmed to the market that Henderson’s proceedings remain ongoing.

“If Jackie O is prepared to be a bit more patient with her return to the airwaves, it will be interesting to see what she is prepared to settle for in terms of a cash settlement compared to Kyle,” Duggal said.

The dual lawsuits came about after Sandilands berated Henderson on-air for her “obsession” with astrology and questioned her work ethic, which led to an on- and off-air clash that ended their 25-year on-air partnership.

The major falling out came just one year into a $200 million 10-year contract with ARN, leading the two popular personalities to take their former employers to court.