The most common and most likely answer to this crossword clue is the 5 plus 2 letter word PHONE IN
I've seen this crossword clue in Financial Times
P
H
O
N
E
I
N
More clues leading to the result PHONE IN
Buddy explains!
The straight part
We know that "show with audience participation" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case show with audience participation = phone in.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does PHONE IN mean?
PHONE IN noun- A show requiring members of the public to telephone the studio.