How late night spliffs led to Kyle’s $50m mega deal


Australia's richest ever entertainment deal started with a "couple of joints" and a few secret late-night meetings at a Sydney hotel.

Kyle Sandilands and Jackie 'O' Henderson this week re-signed with Australian Radio Network's KIIS FM for another three years in an eye-watering deal worth up to $10 million a year each, when incentives and revenue share are factored in.

It will see the controversial duo host their Kyle and Jackie O Show at the station until the end of 2024.

The deal was struck in a single meeting with station bosses, but had its genesis more than five years ago when the pair's former network decided they had been on air for too long, according to Sandilands.

"They basically told us 'you've been on together for 10 years so it's time for a refresh'," Sandilands told The Sunday Telegraph.

"We were told we were coming to the end of our run despite being number one."

Sandilands was incensed by the perceived lack of respect shown to him and Henderson and couldn't understand how, after a record-breaking run of FM ratings wins, they were going to be moved on.

"It goes without saying I got angry. I calmed down by smoking a couple of joints and started to make phone calls," Sandilands said.

"Before I knew it - and after a few sneaky midnight hotel room meetings - I had entered Jackie and I into negotiations with the Australian Radio Network. The rest is history."

Soon after those late-night talks, it was revealed contract negotiations between Austereo and their breakfast team had fallen over and the pair would be leaving at the end of 2013, taking their show to rival station MIX FM, who would totally rebrand to KIIS FM on the same day the following January that Sandilands and Henderson debuted from their new Macquarie Park studio.

Sandilands negotiated his move from 2DayFM. Picture: Richard Dobson
Sandilands negotiated his move from 2DayFM. Picture: Richard Dobson

The move was a huge coup for ARN and the substantial financial outlay paid off when Sandilands and Henderson topped the first FM breakfast ratings after defecting.

Losing Sandilands and Henderson was disastrous for Austereo, the departure cursing the timeslot. 2DayFM has trialled at least 13 different personalities in the slot since their departure, including Rove McManus, Sam Frost, Sophie Monk, and Em Rusciano, and none have managed to make a dent. Indeed the station last month ditched the talent-led format in favour of a music-led program hosted by Jamie Angel.

Sandilands said when his former bosses realised the hole they had created by allowing him and Henderson to leave, they started knocking on his door again with bags of cash.

"Their direct words were 'sit down … $5 million a year to come back' and I laughed and said 'I'm already on more than that here'," he said.

Kyle Sandilands and Jackie O have just signed the biggest contract in Australian showbiz.
Kyle Sandilands and Jackie O have just signed the biggest contract in Australian showbiz.

"They said 'can you give us 20 minutes?' and then rang back and said 'sorry we can't compete with that'. They had no more money because they'd wasted it all on Rove and 30 other breakfast shows and middle management and they still made no money."

When contacted by The Sunday Telegraph, Southern Cross Austereo refused to comment.

Sandilands, who on Thursday night will be seen in the new season of Trial By Kyle at 8.40pm on Channel 10, said before he was even approached by Austereo bosses, he was fielding strange phone calls from well-known television celebrities with no known connection to the radio network.

"High profile people from TV were ringing me up going 'so what would it take to hypothetically get you back to Southern Cross Austereo?' and I would be like 'I don't know I'm not even thinking about it'," he said.

"This happened to me a few times and I was like 'have you been asked to approach me.' There were a lot of hypothetical questions that are very much the same, coming from the same style of people."

Sandilands and Henderson celebrate an FM ratings win.
Sandilands and Henderson celebrate an FM ratings win.

But money was never going to the be the thing that drew Sandilands in.

"It's more than just the money, it's the group of people you work with," he said.

"It would have to be more than money to get me somewhere else. There would have to be a breakdown of communication with the current team that I work with or the management structure at ARN.

"Austereo turned into something like a radio station that the tax department owns - all about money and figures and graphs and bullshit - not everyone was into it," Sandilands added. "The CEO where we are now, he's jumping up and down and yahooing around, he's not just flying around on jets. He's right there with us, it feels like we're all doing it together."