We got a small glimpse of what makes Kyle Sandilands tick when he was interviewed on ABC TV's Enough Rope four years ago.

''When I grew up, I realised that you can make money out of just being a smart arse - what better job to have?'' Sydney's shock-jock-in-chief revealed casually.

Being a smart arse has certainly delivered him fame - or infamy - and reaped a fortune thanks to his top-rating breakfast show on 2Day FM alongside co-host Jackie Henderson, better known as ''Jackie O''.

But the 40-year-old's penchant for on-air thuggery came perilously close to bringing him undone this week.

An outburst against a News Ltd entertainment writer, Alison Stephenson, after she reported the poor response to his latest TV venture took the self-styled ''King Kyle'' to new depths.

Ripping into her appearance, including the choice remark that ''you haven't got that much titty to be wearing that low cut a blouse'', and threatening that he would ''hunt her down'', Sandilands set off a firestorm in social media that within hours had advertisers pulling their dollars out of the show.

Holden was first out the door, followed by a steady queue of others culminating in the departure of the client with the deepest pockets, the federal Department of Finance, which coordinates Canberra's advertising spend.

One media buyer told the Herald that within hours of Sandilands' on-air rant, he'd emailed every company on his extensive client list to alert them to the comments and seek instructions on a response.

''Affiliation with a guy who is controversial can be really appealing, it can make a brand look edgy,'' the source says. ''But now they are sitting there going, oh god, is this getting to point now where we want to distance ourselves from him?''

It didn't help that Sandilands' verbal assault on Stephenson took place in a week when other men prominent in the media, like the 702 ABC Sydney breakfast announcer, Adam Spencer, were promoting the White Ribbon campaign against violence towards women.

Spencer told his audience he regarded Sandilands' remarks as ''heinous''.

For much of the week, the owners of 2Day FM, Southern Cross Austereo, hunkered down in their Melbourne headquarters behind a wall of silence.

Only late on Thursday did its chief executive, Rhys Holleran, issue a brief statement saying the company did not condone Sandilands' statements and that he was ''addressing the issues with Kyle personally''.

Most industry observers agree the station's coffers have taken a hit, though how severe is difficult to judge. The Kyle and Jackie O show reaches deep into the lucrative 15 to 25 demographic, but also rates well across other age groups , making it the ''premium show to buy'' in the words of one media agent. Nearly a million Sydneysiders tune in daily.

King Kyle and his sidekick are the station's anchor, capturing an audience 2Day FM seeks to lock in for the rest of the day. So premium advertising dollars are at stake. However, there is some evidence that among the more than 20 advertisers who have withdrawn from the show - and they include Blackmores, Telstra , Harvey Norman, American Express, Mazda, Mitsubishi and Vodafone - several are shifting their spend to other slots on the same station, which is buffering 2Day FM's earnings to some extent.

Some industry observers are now pondering the point at which the show stops being a money maker and becomes a money loser.

Those who know the radio game believe the Kyle and Jackie O Show is an expensive operation for Southern Cross Austereo. Apart from sky-high salaries for the stars - Sandilands' package has never been made public though is estimated to be more than $2 million, topped up with hefty bonuses when he exceeds ratings targets - his end of the show is increasingly broadcast out of Los Angeles. He keeps another home there and station management have been expressing frustration about how much time he is spending there.

''If enough ad revenue comes out, the minute it's not paying for itself, they have not got the solvency in that business to run it at a loss,'' someone with a close knowledge of the station's workings says. ''If the market really pulls out hard, they could find themselves with no other option but to shut it down.''

Sandilands would be hard to dislodge unwillingly.

''He's got a pretty meaty contract … some big protections around him,'' this insider says. ''It would cost a lot of money to exit him.''

The mouthy star has overdone the shock factor many times before, and was on suspension from the station for a period in late 2009. Past transgressions include an on-air jihad against another columnist, Fiona Connolly, whom he was eventually banned from mentioning on air, and suggestions comedian Magda Szubanski go to a concentration camp to lose weight (her father had risked his life fighting the Nazis). In late 2009 he forced the normally quiescent regulator, the Australian Communications and Media Authority, to act when he quizzed a 14-year-old strapped to a lie detector on air about her sex life. (It emerged she had been raped at 12.) The authority imposed a new licence condition on the station, a rarely used sanction, to enforce better protection for children.

The wheels of the regulator move painfully slowly, the result of a 20-year-old complaints system crafted in another era, long before the 24-seven news cycle and proliferating digital platforms re-cast the media landscape.

''What is missing in the system now are mid-tier powers,'' one official says. ''The investigative process can take months, with documents going back and forth. By the time it goes through, it's not real-time regulation. We have said for quite a while that we think there is a lot broken about the system.''

The risk for commercial broadcasters is that if they don't improve their own accountability, the government will do it for them - and it may be only too happy to oblige.

Some inside observers believe Sandilands might be getting more than a little jaded with his show. They note the odd occasion when he has called in sick despite being spotted partying the night before. He has other interests, including a management agency and record label run through King Kyle Holdings Pty Ltd, in which he is sole shareholder and director. Last year he partnered with the controversial night-club identity John Ibrahim in two Kings Cross bars. The once-lippy kid who, according to his own well-honed story, was kicked out of home at 15, is said to be increasingly drawn to the flash of LA, where he hangs out with the celebrity sub-strata. ''I think he has gotten over it [the show] in the last year,'' one close observer says. ''He goes in [to the studio], earns his money and gets out. That attitude leaks into the show.''

Fellow broadcaster Wendy Harmer wrote on The Hoopla website yesterday that she had once ''opined that he was a decent person … However, the rewards showered on Kyle for getting the ratings, at any cost, have warped his sense of importance and his values. I don't think that I'd recognise him now.''

Sandilands' grandparents dubbed him Lord Fauntleroy and he confessed to Andrew Denton that as a child he would cut out pictures of ''really nice crystal vases'' while everyone else would be kicking balls around the yard.

These days he has a Rolls-Royce Phantom to call his own. But that, and all the other trappings, haven't been enough to appease what often seems to be the angry teen lurking not far beneath the Sandilands persona.

King Kyle's outburst rocks the empire