Howard Stern’s Production Company Sues Sirius XM
News broke today on TMZ that Howard Stern is suing Sirius XM Radio. The radio icon has long demonstrated differences of opinion with his current and former employers. Some of these differences have indeed landed him in law suits.
Ironically, I felt that Sirius XM had a suit against Stern when he did not allow his radio show to be broadcast over apps for smart phones, but did allow for internet streaming. I think Sirius XM had a decent case, and a great argument, but the company must have been unwilling to pursue the issue, perhaps fearing the negative appearances it would make, and knowing they needed to negotiate with him in another year. It would seem that Howard does not have the same feelings when it comes to the sensitivity of such things.
To be fair, the suit is not being brought by Howard personally, but rather his production company, One Twelve. While this veil may make him feel better, and even offer some “deny-ability”, in the end, he is in effect at war with Sirius XM over stock options.
The issue stems back to the original (often misunderstood) contract with Sirius. How a new deal was struck without the sides ironing this out is beyond me. One possible explanation is that Sterns camp did not express frustration about the issue until after the new deal was signed.
It would appear that The King of all Media’s production company is wanting to count the total subscribers of Sirius and XM as a result of the merger as support for their argument that the subscriber targets that would pay bonuses to Howard and his agent, Don Buchwald, were met. If correct, Sirius XM would be required to award additional shares of stock. Howard has said on several occasions that it was his presence on Sirius that forced XM to merge with Sirius.
The facts are that XM was successful by itself without Howard Stern. In fact, the XM side of satellite radio boasted more subscribers than Sirius. Interestingly, the last time Sirius mentioned the statistics on the “Best Of Sirius” package available to XM subscribers, the numbers were at about 1 million. This is perhaps one of Sirius XM’s better arguments to combat the litigation brought by One Twelve Productions.
The suit will likely be discussed on The Howard Stern Show (ch. 100 and 101) over the coming days, and certainly will get Stern fans in a bit of a tizzy. The irony is now Sirius XM has to prove how worthless Howard Stern is while he argues his greatness as he usually does. The suit could bring a wedge between Howard and Sirius XM just as the new five year deal gets underway.
Should Howard get to count a bunch of subscribers that do not even have access to his channels? Will Sirius XM stock (NASDAQ: SIRI) be impacted by the negative news about one of their premier talents suing them? Will other personalities view this as a reason that perhaps they should not sign with Sirius XM? At stake are stock options numbered in the millions, possible dilution, and the company having to account for these in their previously outlined positive numbers for 2011.
[via TMZ ]
Position – Long Sirius XM Radio
Thanks for jumping on this Spence and outlining the particulars . . . speaking strictly as a shareholder, I have 2 words of advice for Mel:
“DAVID BOIES”
case dismissed
“Will other personalities view this as a reason that perhaps they should not sign with Sirius XM?”
Ok, this was a real silly statement you made.
Bubba expressed frustrations with Sirius XM, but that could be reasonably explained away as Bubba being Bubba. Jason Ellis has expressed frustrations of his own as has Jay Thomas.
If talent sees that Sirius XM has problems with their marquis names like Howard, they may have second thoughts about how a deal with the company is struck.
Bubba wanted way too much for his fat ass deserves. Howard is an extraordinary case and his contract was likely very complex and stock, incentive based. Talent that might sign with Sirius does not have to put their signature on the dotted line if they don’t get what they want and if they don’t read the small print, then it’s their problem. When Sirius gets passed all the bullshit that they still must contend with through this August and really start rolling in the $, they can maybe make some little guys a bit happier. But you have to be careful not to set a precedent. I think a few of these personalities are disgruntled because they know the sick $ Howard makes. They are not Howard.
The point is that there is an emerging pattern of some of the talent Sirius XM has not being entirely happy. That is fine, but with new players emerging in audio entertainment, these people may consider other avenues much like Bubba did. Sirius Xm has to be careful from here out. They are not the only show in town.
I agree with Spencer, this pattern is resonating through the industry. Bubba, Thomas, Ferrel, and now today Ellis. Howard himself that Sirius XM is terrible place to try and make money in radio TODAY on his show.
Bubba wanted too much? They offered him a 80% pay cut.
A few guys like Howard, O&A, Bubba, Ellis, Thomas, and Ferrel get together and make a move to something like radioio and Sirius XM has a real problem.
But, he already re-signed for another 5-years last December.
The problem is that they paid Howard and Oprah too much now everyone wants a piece of that. Keep in mind we are talking about pieces of tens and hundreds of millions.
Regardless Howard Stern aka Howard the lame duck. ….doesn’t get shares of the newly formed company and once again the white nite John Malone gains control of siri/xm… Pound sand Howard. The Fcc doesn’t like you The Doj doesn’t like you and well there you have it!
Can anyone say “full of himself”? It’s a “Charlie Sheen” but in a totally different way. Sirius had to pony up money to “merge” with XM — that had nothing to do with it?
Hook nosed bastard…………
HS is a greedy evil SOB. He seems miserable and should have retired. SIrius XM should have offered him jsut enough to not insult him, but not enough for him to want to come back. He doesnt give a crap about stockholders. 100% of his income until now has been 100% paid by you. Period. You hired him, not Sirius XM. If HS didnt like the SP, he shouldnt have raked the company over the coals to sign him. What Sirius paid him to come here was criminal at the time. Stockholders should have sued.