Why is ARN’s boss so optimistic about the company’s future?
ARN’s revenue is falling, and it only managed to turn a $800,000 profit (NPAT) in the first six months of the year. The company has the country’s two highest-paid entertainers on the books, who are also partly responsible for the downturn in advertising.
Yet, Ciaran Davis, ARN’s chief executive officer, tells Mumbrella he is optimistic about the future of the business.
“Absolutely”, he answers, after coming off an investor call in which the term “reset” and “transitional” were used roughly eight million times.
“I think what we’ve done is we’ve streamlined operations,” he says. “We’ve simplified operations, which is a very difficult task to do. And when you’re talking about people — headcount — out, it can be challenging.
“But we have executed very well over the last six months. The business is settled.”
The restructure saw ARN launch into a $40 million cost cutting program, which involved 240 job losses. It brought in a new chief operating officer — Michael Stephenson, formerly of Nine — and a new CFO in Alexis Poole.
The company paid down $8 million in debt, decreased underlying costs by 5%, and have ‘actioned’ $35 million in savings.
“We’ve restructured the commercial team,” Davis continues. “We’ve brought in new leadership across several functions. We’re enhancing our digital audio capabilities. The commercial team is settled in market. We’ve seen some audience growth come back in the first half of this year, which is good. We should see share regain.
“I think we’re very well positioned to take advantage of the hard work and the difficult work that we’ve done over the last six months,” he concluded.
Ciaran Davis
Optimism is great, but the company’s financial results for the first six months of 2025 don’t paint a pretty picture.
Radio revenue is down 9% year-on-year, with metro falling 12% and regional down 5%. Digital audio grew by an impressive 21%, but the dollar number was only $2.4m.
That couldn’t make up for the $10m drop in metro advertising, or even the $2.9m regional drop-off.
For a company looking to cut costs, its digital audio strategy is wise. They licence the app itself and a swathe of internationally successful content from iHeart in the US – part of a long-term deal that means ARN don’t need to build and maintain a podcasting platform, and can leverage the iHeart brand in Australia.
The obvious strengths of ARN’s digital audio play — low capital expenditure for a proven platform — rub up against the weaknesses. For one, it is beholden to the development whims of an international company, and its scheduling. There is an iHeart app refresh coming in October, which Davis said will be launched at its upfront, however ARN has little quality control over the finished product.
The history of the internet is rife with examples of app updates making an entire platform less functional. If iHeart blow it on a technical front, ARN’s entire digital audio play is weakened. That’s a vulnerable position to be in.
By comparison, ARN’s biggest competitor, Southern Cross Austereo, built its own podcasting platform, Listnr, creating a valuable if expensive piece of propriety technology, and a digital audio brand to boot. Development for Listnr started in 2018, it launched in 2021, and by mid-2023, the company declared its “major digital investments are complete”.
On Monday, SCA posted its FY25 results that showed, in the first six months of 2025 (or, if you like, the final six months of the financial year), Listnr generated $1.9m in EBITDA (earnings before interest, tax, depreciation and amortisation) from revenue of $23 million.
ARN’s digital revenue for the first half of 2025 was $13.4 million – with an EBITDA of $1.4 million.
ARN also has plans to use the DAB+ streaming radio format to launch The Christian O’Connell Show into the Brisbane, Adelaide, and Perth markets, with the Gold 104.3 Melbourne breakfast show being syndicated live into Sydney’s Gold FM station.
When O’Connell made the announcement on air that his breakfast show was going national, it was assumed he would be broadcast on FM stations in each of the five metro markets.
The accompanying press release didn’t mention DAB+ at all, and O’Connell himself told Mumbrella after jumping off air they are still working on how to manage the time differences.
It only emerged later that morning that O’Connell will be on the DAB+ platform outside of Melbourne and Sydney – a niche listening platform that counts its listeners in the thousands.
Gold will launch onto DAB+ in those other markets, with O’Connell in breakfast, and Amanda Keller and Brendan Jones (who were bumped from Sydney’s breakfast after two decades to make way for O’Connell) in the drive slot.
Christian O’Connell
Davis said there are no plans to put O’Connell on the FM band in the other cities.
“DAB+ is growing in importance in terms of audience generation, the more proliferation of DAB sets there are,” he says.
“But, it allows us to build a national footprint for Gold — which means that we can monetise a lot easier, and open up the actual opportunity for advertisers from a national perspective. And that’s very attractive.
“So it’s not just about DAB or FM, it’s about streaming on iHeart as well.”
With loud rumours that ARN is planning to spend $1.5 million on its splashy October 29 upfront (I can confirm those rumours have also been heard in the halls of SCA), surely an app refresh won’t be the biggest news revealed on the night.
Another rumour flying around the industry involves Kyle and Jackie O taking the foot off the gas in Melbourne — where it has managed just a 5% audience share in breakfast, sitting in eighth place and tussling with Sports Entertainment Breakfast for that ranking — and launching into the Brisbane market on the KIIS network.
So, is there any truth to the Brisbane rumours?
“I’ve heard that [rumour] spoken for two or three or four years now,” Davis says. “And I know Kyle would like to do it. We continually assess it.
“As of the moment, we are focused on delivering the back-half goals that we have.”
These include the iHeart app reboot, refreshing the content on the KIIS radio network, and the sale of its Hong Kong-based out-of-home business Cody.
Davis, Sandilands, and Henderson at ARN’s North Sydney studios, where Sandilands blamed ARN for their poor performance in Melbourne.
“But it’s something that we always look at,” he says, of moving the duo into the Brisbane market. “And we always take advertiser feedback and listener feedback before making these decisions.”
ARN spent eight months in late 2023 and early 2024 trying and failing to take over its rival SCA: buying up close to 15% of the business, teaming with Anchorage Capital, and offering a consolidation plan that would blend the assets of the two audio companies – which SCA rejected multiple times, feeling the various deals undervalued what it brought to the table.
The Australian reported on the weekend that Nine is in talks to buy SCA wholesale.
SCA’s chief John Kelly stopped short of confirming the story, but told Mumbrella this week he is open to talks.
Is Davis still interested in throwing his hat into the ring?
“Well, we’re still a shareholder,” he reminds. “So yeah, we’ll look at anything. We’re still firm believers in consolidation in the media market. We think it needs to happen. We think the increasing power and influence of global players means that the Australian media owners actually are at an unfair advantage.
“We’ve got to try to look at consolidation opportunities. And we would look at any opportunity that there is to enhance shareholder value.”
So, the company still sees value in an ARN/SCA merger?
“We do,” he confirms. “We would look at any proposal that would actually enhance, not only shareholder value for the shares that we have in SCA, but also opportunities to drive further shareholder value for ARN shareholders.”
So, 2025 is a resetting year. And October 29 will see the next major announcement from ARN.
Something tells me, though, that no media company in 2025 would spend $1.5 million on a party, invite 1,500 of their closest, cocktail-dressed friends – only to tell them all about an app update.
If you happen to see Sandilands mansion shopping in Queensland – act surprised.
Keep up to date with the latest in media and marketing
Got a tip?
Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
Linkedin
Have your say