Sandilands and former co-host Jackie Henderson were let go by media group ARN after an on-air spat during their top-rated KIIS FM morning breakfast show in March.
The blow-up sparked a backlash from advertisers after many were targeted in a campaign led by a high-profile activist group Mad F***king Witches.
ARN spent an earnings briefing on Friday playing up its push into digital entertainment and touting a "reset" of its media business, after revealing its first earnings loss in years.
The group's statutory loss came to $28.3 million, a sharp turnaround from the $818,000 it made in the prior corresponding period.
Revenue fell 14 per cent to $126.8 million, while its underlying earnings also fell - by 27 per cent - to $18.2 million, in the six months ended June 30.
"While the first half result is not where we want ARN to be, the board is clear that the decisions being made now are the right decisions to change the trajectory of the company," chair Hamish McLennand said.
The revenue decline reflected a drop in Metro radio advertising earnings "as a result of brand safety concerns" linked to the Kyle and Jackie O show.
But ARN also said it was coming off a relatively high base due to earnings from federal election campaign advertising in the year-before period.
The net loss included the impact of $17.2 million in legal costs and settlement to be paid to Sandilands over three years, as well as an impairment charge of $25 million.
Both hosts launched lawsuits against their former employers, and Henderson's remains before the courts.
Chief executive Michael Stephenson led the charge to dump the radio stars - who were a couple of years into a $100 million 10-year contract - after more than 20 years on air.
Asked about the group's thinking on new talent and rebuilding its audience share, the radio boss said ARN was close to finalising talent agreements with new stars who will join in the "coming weeks and months".
"Very rarely do you get an opportunity to reset your talent base, and that's what we've had in this six-month period," he said.
"There's been a lot of demand from a lot of people wanting to join ARN for these very, very premium roles in our breakfast time slot."
The group's boss admitted there was now a mismatch between advertising revenue and the Metro radio network's market share - its audience share is 25 per cent while its revenue share is 18.5 per cent.
ARN estimates that every market share point gained is worth about $6 million a year, arguing that it has a revenue "growth opportunity" worth about $38.4 million
"Our immediate priority is to regain the revenue share that we have lost," Mr Stephenson told an earnings call.
ARN tallies its national commercial radio audience at 12 million people a month.
"We enter into a new world, where sure the audiences might be lower to start with, and I have every expectation that will grow over time," Mr Stephenson said.
"We will generate as much revenue as we did previously, albeit on a different model."Â
In the meantime, ARN expects its increased focus on digital revenue growth - including livestreaming, video and podcasts - will negate radio declines.
Of its interim revenue, metro radio accounted for $60 million, followed by regional radio ($54.2 million) and digital ($13.7 million).
"Over time, any decline in radio revenues will be more than offset by the growth in digital revenues and this growth will come from audio and video podcasts and live streaming," Mr Stephenson said.
The digital video and social video markets are worth $5 billion and $2 billion, respectively, a year, he said.
ARN has suspended dividend payments.
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