In this guest post, Scott Spiegel shares his thoughts on the state of current high priced/low value contracts.

Some news outlets are reporting that a possible hostile takeover of SiriusXM could happen in the coming months.  New owners (such as Echostar) would have the ability to renegotiate any existing contracts, once in control.  To be honest, I don’t find this to be the least bit objectionable.  It’s time for SiriusXM to trim some fat… whether because it’s forced to, or because it’s the right decision to make.

Many might say that the most obvious candidate for contract renegotiation is Howard Stern.  They’d be wrong.  Stern (despite his penchant for unfairly attributing ALL of the company’s success to himself) is still probably the most single-handedly responsible for Satellite Radio’s current viability, and there’s no other radio guy in the world that could solidify the existence of an entirely new media entity the way he did.  However, the product was amazing before Stern (I had the service—and believe me, it was worth it before he came over or even announced his intentions, for that matter), but what he brought, was the realization that talented radio artists and good programming will bring loyal listeners.  The Howard Stern Brand only got him so far; new subscribers only began to come over in droves months after his arrival because they found out how much great entertainment they had been missing.

The problem? SiriusXM is tied to too many contracts that are valuable because of the star-power of the channel names only. In reviewing a listening guide, three names immediately pop out to me.  The Foxxhole, Shade 45, and Mad Dog Unleashed.

The channels themselves aren’t bad at all.  My complaint is that millions were spent to secure these personalities–to be the faces of their own programming.  If the Foxxhole were just a station (with a different name) that played comedy geared towards black audiences, it would be fine.  But when millions are spent so that Jamie Foxx’s picture can be on the channel guide, it just seems wasteful.  Jamie Foxx is an amazing talent, but you’d think that he’d do more than one show a week to get his own station.

When it comes to Shade 45, Eminem’s only real attachment to the station is by name only.  New albums may debut on the channel, but when was the last time Eminem came out with new material?  Three years?  More?  Even still, is debuting an album worth the cost?  I have never even heard Eminem speak on his OWN channel.  I’m no die-hard Shade 45 guy, but you’d think he’d have more of a presence.

With Mad Dog, I think SiriusXM did not drop the ball because of Mad Dog and his ability to program a channel.  I question the signing mainly because of timing.  If Sirius is struggling to make an upcoming debt payment, then why devote $3 million or more a year to a guy who won’t bring in that value in new subscribers.  Mad Dog is great, but is he known beyond New York City?  Not really.

Don’t even get me started on Oprah and Friends.  This is a poor contract that Sirius had to absorb because of the merger.  And much of the programming IS NOT EXCLUSIVE.  To be frank, for the hundreds of millions of dollars she’s getting, SiriusXM could be doing a lot of better things.

If the company were in better shape, I’d have no problem with any of the previously mentioned channels.  However, now is the time for SiriusXM to start to think about putting money into the content itself, rather than into cool channel names.

Scott Spiegel is a freelance writer based out of Houston, you can learn more about him at