Fruit that's round, as it happens (5)
I believe the answer is:
'fruit' is the definition.
(I know that olive is a type of fruit)
'round as it happens' is the wordplay.
'round' becomes 'o' (o is a circular letter).
'as it happens' becomes 'live' (as in live television).
'that's' is the link.
(Other definitions for olive that I've seen before include "Cocktail fruit" , "This branch is offered to show peace" , "Mediterranean fruit or greenish colour" , "Fruit; Popeye's girlfriend" , "Female" .)