The Howard Stern Drama Begins
You didn’t have to be a rocket scientist or even a Howard Stern fan to predict what has now begun. The Stern drama has started and will continue until he re-signs a deal, or exits his contract with Sirius XM. The latest is a classic example of something being taken out of context, and blown out of proportion by the media, and perhaps the King of All Media himself.
In a recent interview, Sirius XM CEO Mel Karmazin stated that he would like to renew Howard for less money and have him work more. The comment was innocent enough, in that the context of the interview was about how Sirius XM is going to cut costs and become a profitable company. Stern, with his big contract, would be a natural target for those critical of the performance of Sirius XM.
Mel Karmazin is a business man, and he is going to give an answer that indicates the goals of the company to cut costs. However, this is Sirius XM, and any comment faces the dangers of being spun out of control by any number of media outlets.
Let’s face it, Howard is finishing off a big contract and he is a major draw for satellite radio. His contract, which has about a year left is a major decision for Sirius XM, and even himself. On his radio show, Howard vented about Karmazin’s comments and ranted about how he may be done at the end of the current deal.
Typical to Stern Show fashion, he is using anything and everything to make his point. This includes rants about the contract and media coverage on his own show. In an economy where everyone is downsizing and cost cutting, should the premier draw of the company take a cut in pay? Regardless of anyone’s opinion, the decision rests with Howard himself and he will play every card at his disposal to make his next sweetheart deal.
If I had to bet on it, I would say he will sign again but, it wont be cheap. The original Stern deal came with a virtual boatload of stock. That stock has gone down in value substantially, thus making his “take-home” pay substantially less than what was initially published.
Ever since Howard Stern signed his first deal, confusion has reigned supreme. Media outlet after media outlet assumed he got $500 million for five years. The reality was that the original deal was $500 million for him, his staff, the studio construction, and a budget all of the talent featured on the Howard 100 and Howard 101 channels. This is not to say that he did not make a lot of money…he did. However, he is NOT making $100 million per year, and with a big chunk of the contract paid in stock that went down, don’t look for a similarly structured contract going forward. Howard will want more guaranteed money.
Howard Stern is no stranger to contract negotiations. He is also well aware that his radio show is the perfect format to get what he wants. The longer this plays out, the more leverage he has. Each news story covering the saga adds to the bottom line IF Sirius XM really wants to re-sign him.
Over the next several months look for the media to question whether Sirius XM “needs” to sign Howard Stern and for stories to question whether or not the company can afford to keep him on board. We saw foreshadowing of this happening with Howard 101 talent Bubba The Love Sponge. Ultimately, Bubba was hired to a contract that has him doing both terrestrial radio as well as satellite radio. Essentially, Bubba became a part time satellite radio employee.
The drama surrounding Howard Stern has just started. Watch for him to continue his radio based negotiations and for the media, as well as analysts, to assign a big question mark to the entire process. This will cause uncertainty that will be a central description of Sirius XM until the issue is resolved.
“Let’s face it, Stern is finishing off a big contract and he is a major draw for satellite radio.”
I believe his numbers have gone way down, and investors would LOVE to see him get cut. He did NOTHING when we needed him for the merger, and his material is like one big fart.
I hope YOU can face it. He is an old fart that needs to go!
Spoken like a true retard, hater or person who has never heard the show.
Bro… just because you “believe” his numbers are down does not make it so… retard…
Stern sold his shares and made about $230 millin off of them. He didn’t hold them all this time.
If he goes who cares anyway, his show is no longer what it was.
He works about 16 hours a week and claims he is working too much and wants to work less? What a lazyass.
good riddance.
can someone run the numbers assuming Stern leaves? how many subs would have to be lost for SXM to NOT increase it’s cash flow considering how much they pay him now?
seems to me there is likely a simple break even(loss) number that may actually help the company if he does leave.
thoughts?
Sirius XM “will” want to re-sign Stern. Stern will re-sign with sirius,most likely in a smaller role, less shows. We will hear more
of the “old” shows that sirius paid for from Terrestrial radio.
If Stern drops Sirius XM, where does he go? Back to Terrestrial? No Way. He could not operate before in that environment, and he can’t do it now. Stern is going to remain with Sirius XM.
In the end, both Mel and Stern will meet in the middle. I think Stern will sign for a three year contract at something like 50 million a year in guaranteed dollars, with bonused tied to the stock price. Mel will move his studio to his home (like Rosie), and everything will be fine.
I’d also like to add that the timing of an announcement is critical. I believe that with the right timing on a new contract announcement, Sirius XM may be able to move the needle closer to the $1 mark. A new contract will signify Sirius XMs committment to the best content anywhere. In addition, they need to get Stern to be move visible. He needs to be on billboards, TV ads, and more talk shows. They need to build that into his contract.
Finally, Sirius XM needs another big announement. It could be in the form of a big partnership, or another big content signing (but I doubt they have the cash for another big name right now).
Its all very doable, and the more drama around his signing the better. I think it works in Sirius XMs favor for all the big media giants to be druming up contraversy about Howard. The more attention (positive or negative), the better!!!!
Brig it on.
I would say good riddance is stern left. Sirius doesn’t need him
Poppycock! This Radio Company doesn’t need Stern OR Karmazin.
What this company needs is Profits! Stern and Karmazin are tremendous expenses which this company can no longer afford. In the Name of Synergies, they both must go!
I’m confident that If Stern Left not too many of this listeners would drop their subscriptions. Sirus has many other offerings that are attractive to them. With that said, I think resigning Stern is importing for Sirius. Not because of his ability to attract subscribers, but because of the message it will send.
Essentially, the talk of the town will be that Sirius XM is watering down its content and can no longer afford top talent. It says to all the NFL fans, that if Stern goes, so could the NFL.
As their Top Billing personality, its important for Sirius XM to commit. Stern is more than his content, he represents a concept. Sirius’ image would suffer damage should they not resign him.
I would like to see the statistis of just how many people actually listen to Stern verses Patriot or the like. Mel has them. Obviously Sirius knows this info and is willing to bet that the loss of Stern wouldn’t be that great of a blow.
Another angle on this whole thing is that Sirius XM may want to minimize Sterns exposure. In other words, Stern is a big part of Sirius and to keep him in the forefront of advertising and the image of Sirius will only may it more painful when he ultimately decides to leave.
“the talk of the town will be that SiriusXM is watering down its content and can no longer afford top talent”
WTF????
What the hell do you think SiriusFM has been doing to SATRAD since Mel & Greenstein took over after the acquisition???
If SiriusFM gets “watered down” anymore it will pass the “The Standard Methods for Examination of Water & Wastewater”‘s(19th edition-APHA/AWWA/WPCF) criteria for distilled water!!!
I don’t know if you are aware of it but SiriusFM’s image has been in the toilet for over a year now and there are still posts from investors who want to eat the peanuts out of Mel’s feces because he’s been doing such a great job!!!
I think there is a possibility that Stern could go off and do his own thing on the internet. WiFi in vehicles is starting to gain traction and a presence like his could really move the needle. I think he might be considering this when I look at the Iphone app and the fact that he is not on it. I think the exclusion is all his doing because there is likely a grey area concerning this delivery channel and his income. The fact that he barely talked about the app when it launched to me says he took himself off.
To the commenter who posted that they wouldn’t lose alot of subscriptions I think you are dead wrong. First of all, many listeners only listen to Stern 24/7 nothing else. Second, Sirius content,especially on the music channels, is not what it once was. Too much like terrestial with tight playlists and repetition. My music consumption from Sirius has gone down dramatically in the last year.
I think that if Stern goes, not many subscriptions go. If he doesn’t want to reduce his contract, I think there will be a back lash from all sides because its just arrogant.
Will I still subscribe to Sirius Xm, yes!
Don’t you think Sirius was trying to do a numbers crunch by not having him on Apple’s Ipod or iPhone wifi hook up, but instead on the best of Sirius? Let the numbers do the talking.
Stern goes? I go…
i never listen to reg radio anymore but i do listen to Howard alot when in the car–I wouldnt end my subscription but i do want Howard, even if he moves to an afternoon slot which is replayed until his next broadcast
Howard old catalog will revert back to him at the end of his contract next year. And like somebody else said the fact that Howard 100 and 101 are not on the IPhone app make me also think he’s looking at an Internet move for a few live show a week and maybe Itune for all the old stuff!
To those who think Stern does not move the needle anymore I should remind you that Howard 101 is the only Sirius channel that get systematically pirated on the net. If you know where to look you never miss a show! So he already got a build in audience on the net willing to do crazy things just to listen to him. You give all these peoples an easy and cheap way to listen online to just Howard and you see if he can’t move the needle anymore!
I can only hope and pray (and im agnostic) that he resigns somewhere… frankly I couldn’t care less if its with sirius or another media… he has been there to make me laugh through tough times in my life so I will follow him wherever he goes.
The attitude around surely has changed over the last couple years.
In the old days before the merger there were people around talking about what a loser Sterns program was for Sirius and those guys got their heads handed to them.
Now it seems everyone agrees – Stern is not worth the money. We are not even talking about 700 million this time as he will surely sign for less unless he just wants to walk away.
Leads to the conclusion some of those guys were right about stern not being worth the $$$$
How many subs did xm have vs. sirius pre-merger? I think this company can survive and thrive without howard. I hope they get him to stay for less money, but if the deal is not completed in sirius xm’s favor give him the boot.
You people who think that if Howard leaves people won’t drop there subscriptons are clearly nuts! If they don’t resign him they will be cutting there own throats! I will leave even though Howards show is nor what it used to be I will still leave and follow him were he goes