Kyle & Jackie O's new 10-year radio deal nets them Millions in ARN ...

All three contracts include a base salary, a percentage share of revenue above what is now earned – known as “incremental growth”, and sign-on bonuses mainly made up of shares in ARN. Those sign-on bonuses do not vest until the end of the respective contracts.

The bonuses were worth a combined $7 million for all three hosts, sources said, equivalent to about 7.5 million shares as of yesterday’s share price.

Sandilands, Henderson and O’Connell’s combined base salaries would increase by about $2 million to $3 million a year over the course of the contracts, ARN said. The company’s executives said price rises would be offset by cutting some costs and by airing the Kyle and Jackie O Show in Melbourne. The Jase & Lauren breakfast show on KIIS in Melbourne will not be returning next year, for example. Chemist Warehouse will be the foundation advertising partner for Sandilands and Henderson’s first year in Melbourne.

In an ASX update to be filed on Wednesday, sources said ARN would spend an extra $2 million a year over the next two to three years to promote the launch of the Kyle & Jackie O Show in Melbourne.

“Love us or loathe us, Jackie and I will be continuing with our politically incorrect nonsense for a long, long time,” Sandilands said in an ARN statement. “Speaking of 10 years... 10 years ago the ‘other’ network we were once at told Jackie and I that we were past our used by date and no longer relevant. So that’s a fun little observation that’s worth mentioning on such a momentous day.”

Henderson added: “It’s an honour to broadcast to Melbourne again after so many years, and to welcome them back to our craziness is really exciting. After 23 years of broadcasting with Kyle, I still pinch myself that our show continues to grow in ratings and in reach.”

The new talent deals are even more significant because ARN has launched a bold bid to take over its main rival, Southern Cross Austereo. It has pitched to acquire Southern Cross alongside Anchorage Capital Partners, split the companies in two, and create two new media entities. ARN would take the KIIS and Triple M radio brands and a network of regional stations, while Anchorage would take the Hit and Pure Gold brands, a handful of regional stations and a network of 96 regional TV signals.

ARN chairman Hamish McLennan said the new contracts were “a vote of confidence”. 

Hamish McLennan, the former chairman of Rugby Australia and current chairman of ARN Media, said on Wednesday morning in the ASX update that the new contracts were “a vote of confidence that Kyle and Jackie O, and Christian O’Connell, will continue to grow their audiences delivering a style of broadcast that makes them so successful.

“ARN Media’s unique compensation package will incentivise them to focus not just on ratings but also to drive commercial success.”

ARN chief executive Ciaran Davis said adding Melbourne to Sandilands and Henderson’s show would “attract new audiences and expand commercial opportunities”. “Melbourne is the largest radio advertising market in Australia and represents an opportunity for ARN Media to grow ratings and revenues on KIIS 101.1,” he said.

“Kyle and Jackie O have evolved into a powerful brand that significantly contributes to ARN’s commercial success, and this new agreement strategically positions us for long-term growth that extends beyond radio.”