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Thread: Stern/Sirius contract, what is the win/win value

  1. #1
    otone is offline
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    Stern/Sirius contract, what is the win/win value

    Lots of speculation on what Stern will do when his contract expires. Assuming he stays with SiriusXM... Where would you place the win/win value?

    Mel, obviously can't afford another 500 million bucks. He'd get drawn and quartered if that happened.

    Stern, won't be looking to agree to anything that makes him look desperate either. He'll have to come out of this looking strong to maintain the feeling that he is relevant.

    Could Mel talk him in to staying with a fairly low number that was based on share at current share price but had a realistic chance of actually matching his current number. Say, 5 years, 150 million dollars (or somewhere around 350 million shares and he can cash out 70 million shares a year... just throwing a number out).

    Like to hear your thoughts about what we could possibly expect wrt a new Stern contract.

  2. #2
    SiriusBuzz is offline
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    Quote Originally Posted by otone View Post
    Mel, obviously can't afford another 500 million bucks. He'd get drawn and quartered if that happened.
    Howard wont stick around for less. You don't think he is going to take a major pay cut just for Sirius XM and his buddy Mel do you? $100 mil per year is his going rate. I could see a two year contract for $180 mil or something along those lines but, I doubt he will take anything lower than $80 mil per year.

    The $500 mil number was not pulled out of thin air, there were other people trying to win Howard before he came to Sirius. So, if Mel can't afford it... maybe someone else can.
    Charles LaRocca
    SiriusBuzz Founder

  3. #3
    john is offline
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    I agree and disagree here Charles. First of all I also said the very samething about them not pulling that figure out of thin air. The thing is XMSR is not there to offer the other amount anymore and really neather are the other radio companies. Now on top of that Stern being Stern said he would never go back and he will not put himself in a position of being wrong. He also will not take to much of what looks like a pay cut. I have a feeling that something in the way of less then 100 million with something else (or at the very least make it look like the same) to make up for it that he (his popularity) has more of a direct control over weather he gets to it or not, like a bigger take of ADDITIONAL advertising dollars. Then you put him in a position where he has to be very popular to get the rest maybe be more proactive in getting subs/advertising.

  4. #4
    SiriusBuzz is offline
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    I agree the competition is not what it was. The only question I have is... how much is terrestrial willing to pay and is he worth it to them anymore? That is the wild card IMHO.

    Although, I am inclined to agree that he will not want to go crawling back to terrestrial... I also fear that he is a total whore. He might take just as much pleasure in pulling subs from Sirius XM and getting the best ratings on terrestrial all over again. He could then scream from the roof tops that He "saved terrestrial radio."

    Less likely... but plausible.
    Charles LaRocca
    SiriusBuzz Founder

  5. #5
    SiriuslyLong is offline
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    I posted earlier on this topic. There is no way in hell that SIRI can pony up another $100 MM per year, 10 weeks of vacation and Friday's off.

    In terms of competition, yes XM is gone, but www.howardstern.com is not. I can easily see him taking TOTAL control of his franchise, both radio AND video via streaming.

    I obviously don't know what was on the table that lead to such a deal, but SIRI blew its wad early on this one. It's going to be a tough act to follow.

    Charles is 110% correct; Stern will not come back for less.

  6. #6
    otone is offline
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    Charles, John, and SL, I cadn see all those sides, which I why I came up with this thread. I hear Stern was pissed off at Sirius (Mel?) for the Rosie thing; yet I hear that Mel is really an ally to Stern (if that is the case, why would he take pleasure in taking subs?). Rosie says on her blog, that the whole reason she is doing this is because of Stern. If Stern was going to go off on his own, wouldn't he have done something to get her on his channel? Stern has a buttload of money, so will Stern find a way to make things work with Mel while still appearing to be and maybe even getting as good if not better deal. It can't be done with straight up Salary. Stern would have to see that Sirius is innovating going forward to go for a "low ball" stock deal, or is it going to be something even more convoluted?


    Interesting to speculate.

  7. #7
    jonpluc@aol.com is offline
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    Stern was pissed because Sirius did an end around on him with Rosie as insurance against him leaving. If Rosie goes on his channel and he bails, he owns her material. This way she is useful to Sirius no matter what Stern does. And Stern threw a fit too and its his own fault for not making a commitment and reasonably making Sirius nervous.

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