Jackie O’s Kiis FM ultimatum emerges as key evidence in contract brawl

Jackie Henderson’s legal ultimatum to Kiis FM owner ARN Media will be the critical piece of evidence in the company’s defence that it was justified in tearing up Kyle Sandilands’ $100 million radio contract, setting the stage for a blockbuster lawsuit that may pit one host against the other.

For more than two decades, Henderson and Sandilands helmed a top-rating Sydney breakfast radio show that netted them – and their employers – tens of millions of dollars in advertising revenue.

But all that changed after they signed new, 10-year contracts worth a combined $200 million that expanded their footprint into Melbourne.

An activist group boycotted advertisers, leading to a huge plunge in revenue for ARN, which also owns the Pure Gold network.

On February 20, the two co-hosts had an on-air bust-up, where Sandilands accused Henderson of being “off with the fairies” and “unfocused” and having a “fixation” on astrology.

Henderson left the show and did not return. Almost two weeks later, she told her bosses at ARN through her lawyers, that she “cannot continue to work with Mr Kyle Sandilands”.

The company used that note to terminate her half of a $200 million, 10-year contract that still had almost nine years to go. It then accused Sandilands of serious misconduct, and gave him two weeks to somehow “remedy” the situation.

On Wednesday, minutes after midnight, ARN told Sandilands it had cancelled his contract, too. He is expected to file a wrongful termination lawsuit against his former employer, seeking tens of millions of dollars in compensation.

It is that legal note from Henderson’s lawyers that will form the centrepiece of ARN’s legal defence, according to a person with knowledge of its contents but unable to speak publicly.

This suggests the note could outline concerns about her safety while working with Sandilands, or detail other reasons she could no longer work alongside him.

ARN declined to comment, and has refused repeated requests to release Henderson’s note.

If Henderson’s words are used to defend ARN in any legal clash, she could be called as a witness to face questions about her state of mind at the time.

This is complicated by her no longer having a contract with ARN, and accusing the company of wrongful termination. A spokeswoman for Henderson declined to comment, given her ongoing legal process.

Sandilands issued a long statement on Wednesday saying he had been treated unfairly by ARN. “I don’t accept it [the termination],” he said.

“Jackie and I had a blue on air. That’s it. The kind of thing we’ve done a hundred times in 25 years.

“And ARN took the situation and decided to try and burn the place down. They sacked Jackie. They suspended me … once they’d made it impossible for the show to go on, they turn around and say, ‘You didn’t fix it. You’re fired!’ ”

Sandilands went on to accuse the company of deliberately stonewalling negotiations.

“They didn’t want to fix this. They thought they saw a chance to get out of the contract they signed with me a year ago, and they ran with it,” he said.

“I’ve got a contract until 2034. I’ve got rights under that contract. And ARN hasn’t honoured the contract. So, it’s over to my lawyers.”

In an impromptu interview with industry publication TVBlackbox one day earlier, Sandilands said his contract had been signed off by ARN chairman Hamish McLennan.

“I’m willing to, I’m willing to execute the contract as signed, as promised. Same chairman signed it, same chairman wants to take it away, so we’ll see what happens,” said Sandilands.

McLennan did not answer calls and, through a spokesman, declined to comment.

Employment lawyer Nick Duggal discusses the statement released by Kyle Sandilands in the wake of his contract being terminated

The termination of two of its highest profile hosts has been a baptism of fire for ARN’s new chief executive, Michael Stephenson, a former executive at Nine Entertainment (publisher of The Australian Financial Review).

In late October last year, Stephenson announced at the company’s up-front event – an annual pitch to advertisers – that it was now an “entertainment” company, not just a radio network.

Sandilands and Henderson featured at the start of the presentation, where Stephenson said top talent would be used more widely than as radio hosts. Months later, it wants to cut ties with Sandilands, and says it would like to offer Henderson another show.

ARN told the ASX on Wednesday it had terminated its agreement with Sandilands and Quasar Media, one of his personal companies. “As a result, the Kyle and Jackie O show will no longer be presented,” it said.

By midday, ARN’s share price had fallen almost 3 per cent to 33¢.

What has been effectively an on-air reality show for two decades appears to have ended in drama.

Sandilands’ team has been quietly filming the fallout behind the scenes from his perspective, including his brief comments to the press on Tuesday. The saga could end up as a real-life reality series.