With contract negotiations for Australian radio’s biggest stars, Kyle and Jackie O, on the cards for ARN Media, Australian media investment veteran Barry O’Brien says the decision should be an easy one, using some of the industry’s biggest missteps as evidence.
ARN boss Ciaran Davis is facing a decision whether to pay top dollar to hang on to the star duo, or face the potential of the pair returning to Southern Cross Austereo, with its new CEO John Kelly looking to turn the company around.
O’Brien says the decision is a no-brainer. “Don’t get me wrong, they are not everyone’s cup of tea,” he says of Kyle and Jackie O, who have delivered KIIS consistent ratings in the near decade since moving across from rivals 2DayFM (Southern Cross Austereo).
“But the reality is they are a great team and offer a consistent winning presence with audiences and advertisers.”
Kyle and Jackie O have found particular form in the past 12 months, with consistent share above 15 per cent at breakfast, which O’Brien says has a powerful halo effect for the station, and the entire ARN network.
History shows that without them, KIIS would perform poorly in delivering audiences and therefore ad revenue, says O’Brien. “ARN has to make a sensible financial decision, but it can’t really afford not to have them.”
As chairman of Australia’s largest independent media agency, Atomic 212, and a stint at Network Ten as chief sales officer, O’Brien has been a leading figure in the Australian ad industry for three decades.
Along the way, he has seen plenty of decisions made by media companies that they have ended up regretting.
As ARN mulls its next move, it would hope to not join O’Brien’s list of the biggest “horror decisions” made by media executives over the years.
Alan Jones and Ray Hadley leaving 2UE and moving to 2GB
“The former’s audience pretty much evaporated overnight, followed by a big chunk of its ad revenue.”
The Nine and Ten networks joining forces in 2001, doing a deal with the AFL, with Seven losing the rights after many years.
“Seven struggled for several years to gain any real traction with audiences and advertisers in the southern states as a result.”
In 2011, Network Ten decided not to do a deal with Foxtel on AFL coverage
“The decision to walk away from AFL hurt their audience and revenue numbers.”
Network Ten misses out on The Voice
“It was in the box seat to buy the rights, but baulked at the price. Nine bought it, and it subsequently became a massive hit for the network.”
Nine walks away from The Voice
“Seven picked it up to great success. It was the same story with Farmer Wants A Wife.”
Nine and Murdoch-owned Foxtel joining forces for the NRL rights
“Ten was left in the cold, even though Lachlan Murdoch had a major investment in the network at the time.”
Brian Naylor moves to Nine as newsreader
“Seven’s Melbourne newsreader announced on air in 1978 he had been sacked, and that show would be his last. Nine called him straight after and signed him immediately. The following Monday he was back on air with the rival network and remained the number-one news presenter in Melbourne for the next two decades.”
Kyle and Jackie O leaving SCA and moving to ARN
“With an estimated $20 million of ad revenue lost and more than $80 million of SCA’s stock value wiped out, it’s fair to say 2DayFM has never recovered.”
With Kyle and Jackie O’s contracts now up for renegotiation, history could repeat itself.
O’Brien’s advice? If you’ve already got an asset of true value, do everything in your power to keep it.
Article originally published on Sydney Morning Herald.