Kyle & Jackie O’s landmark deal suggests SCA takeover is all but done, right?
On Wednesday, Kyle Sandilands and Jackie ‘O’ Henderson confirmed that they had extended their contracts with ARN Media for another 10 years, locking the breakfast duo on the KIIS network until the end of 2034.
It’s huge news and one that ends months of speculation that Kyle and Jackie O could return to Southern Cross Austereo; the very station they departed in controversial circumstances in 2013. But there’s a bigger story here.
To coincide with their deal – which will see Sandilands and Henderson’s contracts increased by $2-$3 million each year – it was also announced that the Kyle & Jackie O Show will be expanding to Melbourne in 2024.
Speaking of Melbourne, GOLD 104.3’s ex-UK breakfast host Christian O’Connell has also inked a five-year extension.
Now, this has been announced as ARN awaits a response from SCA about a takeover proposal first put forward in October. The intention is for the radio and television assets of ARN and SCA to be separated into independent ownership by each of ARN and Anchorage Capital Partners, which would then result in “two separate, national media organisations that will compete independently of each other on metro and regional radio, and more broadly.”
In this scenario, ARN would create a “focused” metro radio network of 10 stations across Sydney, Melbourne, Brisbane, Adelaide and Perth – each city featuring a KIIS and Triple M brand – plus a larger regional network of stations and co-ownership (with Anchorage) of a joint venture of digital assets (potentially including SCA’s podcast platform, LiSTNR).
Not to mention, just last week Seven West Media acquired a 19.9% share in ARN, signifying that the media giant is also backing ARN’s proposal.
So let’s add this up: a takeover pitch, plus mega extensions on three of your biggest hosts’ contracts, expansion plans, a media giant backing said plans, an admission from SCA that it needs to cut $10-15 million in costs by June next year AND for the first time in their 20-year career, Kyle & Jackie O are expanding to Melbourne… pure coincidence?
To quote SCA chair Rob Murray when he was asked at October’s annual general meeting if ARN’s target of December to get the deal the done was realistic – it’s “highly optimistic”.
Sandilands himself took a shot at his past employer when the new deal was announced yesterday: “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.”
Brutal.
In what has been a chaotic few months for the network, there has been some wins. At October’s AGM, Rob Murray said SCA’s LiSTNR podcast platform is on target to be profitable in the last quarter of this financial year – which would be a significant achievement – while CEO John Kelly also added that SCA is “looking forward in the years ahead to delivering the benefits to our shareholders, our partners, and our communities.”
Adding to this, it was revealed only last week that SCA favourites, Hamish & Andy, took out the crown for Australia’s #1 podcast for a record-breaking 22nd time.
It can be argued that there still is hope for SCA to remain in its current state – what can’t be argued is the lopsided battle it finds itself in. SCA could make the case to investors that staying with the current setup would be in shareholders’ best interests, but that case is yet to be made.
Despite the frantic movement that’s occurred since the October bid was announced, ARN CEO and managing director, Ciaran Davis, told Mumbrella this week that the deal for Kyle & Jackie O has “no impact” on the SCA proposal.
At first glance, it seemed a December deadline for the deal was far too optimistic, but when you stack all the pieces together, it’s hard to see how the result will be anything other than ARN taking over SCA very soon.
When pressed on the deadline, Davis told Mumbrella: “Those conversations are ongoing… that’s remaining confidential for now.”
The only question remaining is how long is “for now”?
I struggle to see the argument being made here…how does one network signing three big names equal it buying another being a certainty Neil?
Also worth noting an hour after publication of this article that the Takeovers Panel put a spanner in the works of the M&A not to mention ACMA and the ACCC haven’t even entered the fray.
Far from certain I would’ve thought.
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