ARN Media has reached a binding settlement with Kyle Sandilands, ending Federal Court proceedings that have hung over the ASX-listed radio network since his acrimonious departure.
The deal includes $12.09 million in cash payments, $1.5 million in advertising credits across ARN’s partner platforms, and a 19.9% net revenue share from Sandilands’ future independent media venture for up to three years.
To unpack what the settlement means legally and commercially, Mediaweek spoke with Michael Byrnes, a partner at Swaab and a specialist workplace relations lawyer.
Mediaweek: What are your first thoughts upon reading the settlement?
Michael Byrnes: What is really interesting about this settlement is that it’s part legal settlement, part commercial deal.
So even though ARN are putting the legal case behind them, they’re entering into, in effect, a commercial; they’ve entered into a commercial deal, a commercial agreement to work together, albeit in a less intense capacity than him actually presenting a programme on one of their stations.
Instead, they will be working together on Kyle’s new venture.
It’s very clever because it’s both looking back, in that it’s resolving the legacy issue of litigation, but also looking forward.
Mediaweek: Interesting. How connected will ARN and Sandilands’ be?
Michael Byrnes: It seems that he’s getting access to ARN platforms and infrastructure. And, in return, will share some of the revenue with them for up to three years.
It’s Kyle using ARN’s infrastructure, resources, and platforms to act as a foundation for his new venture.
Mediaweek: Do you think that, overall, it’s a good result?
Michael Byrnes: It’s almost a textbook example of the benefit of a settlement of proceedings.
A court couldn’t have ordered ARN to provide access to its infrastructure and platform for Kyle’s new venture. All they could award was either reinstatement, which was always highly unlikely, or more likely a cash amount.
But what an agreed settlement enables parties to do is structure arrangements in creative ways that benefit both parties.
And so, on the one hand, they’ve got the resolution of legal proceedings, which is great for both sides and avoids a protracted court battle.
Kyle, in particular, was, it seems, frustrated by how long the litigation was taking. And of course, it hung over ARN like a sword of Damocles, the possibility that there could be this huge damages payout at some point in the future, possibly, hypothetically, an amount even exceeding their market cap.
Mediaweek: While $12 million is nothing to sneeze at, it seems markedly lower than the original $85 million Sandilands was suing ARN for. What are your thoughts?
Michael Byrnes: Even though the cash amount might be at the lower end of the acceptable range, Kyle has cleverly leveraged it to get advertising support.
So, that’s the additional $1.5 million in advertising support, advertising services, and access to platforms and infrastructure to enable him to move on to his next venture, which he seems genuinely excited about.
And so, out of the dark cloud of the litigation and the implosion of the show, there’s this silver lining of the next phase for Kyle, a phase that will be supported to some extent by the very party he was suing – ARN.