Howard Stern staying put at Sirius XM

Howard Stern, the king of all media, will continue his reign with Sirius XM.

Ending speculation that he was going to take his show to the next frontier -- whatever that might be -- radio personality Howard Stern said on his morning show Thursday that he had signed a new deal that will keep him with satellite radio broadcaster Sirius XM for five more years.

Stern, who turns 57 next month, did not reveal details of the new pact but word that he was staying put was enough for investors to drive Sirius XM stock up about 20% in early-morning trading.

Stern joined Sirius XM in 2006 in a five-year deal valued at $100 million annually. That price tag was for the show, meaning that it also covered costs of Stern's morning program and salaries for his team. Still, Stern himself was likely taking home over $40 million a year. Over time, Stern has decreased his workload a little. He now does his show four days a week, and some analysts suspect that, down the road, he may cut back to three days under this new deal. 

With almost 20 million subscribers, Sirius XM has grown tremendously since Stern made the jump from FM radio. At that point, the company had about 600,000 subscribers. Of course, much of that growth came from the merger between Sirius and XM. Still, Stern has a rabid following and probably north of 1 million faithful listeners.

The challenge for Sirius XM was keeping Stern without breaking the bank. The company, which was teetering on the verge of bankruptcy just a few years ago until Liberty Media made a huge investment in it, has wanted to rein in some of its programming costs. At the same time, Stern provides a huge promotional platform for the service and signing him was groundbreaking for the company, leading to its recruiment of  other big talent.

There was lots of talk about Stern going elsewhere, but it would have been tough for him to get the kind of coin Sirius was going to pay him even if the company did pay him less (in return for a lighter schedule). Although he has the brand to launch his own Internet radio operation, it would have been costly and  faced with technological hurdles for Stern in terms of being able to reach his core audience of morning commuters.

A return to broadcast radio also was unlikely. Among the reasons Stern left FM was the Federal Communications Commission's scrutiny and fines. On Sirius XM, he gets to say what he wants.

--  Joe Flint

Related post: Howard Stern and Derek Jeter have a lot in common.

Photo: Howard Stern on Dec. 1, 2010, in New York. Credit:  Associated Press

Lots of similarities between Yankees' situation with Derek Jeter and Sirius XM's talks with Howard Stern

If Derek Jeter ever went on Howard Stern's satellite radio show, many of the questions would no doubt be about the bevy of beautiful women the Yankees shortstop has dated over the years.

While that would fascinate the bulk of Stern's male audience, the radio personality himself might benefit more by talking with Jeter about his recent renegotiations with the Yankees. There are a lot of similarities between what the Yankee shortstop just went through and what the self-proclaimed king of all media is dealing with right now.

Both Jeter and Stern are New York institutions with national fan bases. Both are considered tops at their position and each has made clutch plays for their teams for years. And lastly, both are arguably approaching the twilight of their incredible careers.

Jeter just finished negotiating a new deal that should keep him in pinstripes until he hangs up his glove in a few years. Stern, who turns 57 next month, is coming to the end of his contract and Sirius XM would like to hold onto him.

The question, though, is at what cost.

The Yankees decided to play hardball with Jeter and talks got heated at times. Perhaps knowing Jeter wasn't really interested in jumping to another team so late in his career, the Yankees negotiated in public and made clear that they felt Jeter's age and disappointing 2010 season meant he should be prepared to take a pay cut.

It's not that the Yankees didn't have a point. After all, prior to this current deal Jeter had made over $200 million with the team. It's not like his next deal was supposed to be some make-good for previous slights. The Yankees saw it more as a reality check. To borrow from Michael Corleone, "It's not personal ... it's strictly business."

Still, Jeter felt disrespected and some fans got irked, because even though they know their idol's best days are behind him, he still puts people in the seats and sells jerseys. Jeter is an icon for the franchise. He has avoided scandals and no one ever questions his work ethic.

Jeter ended up signing a deal that will pay him less (his annual salary dropped from almost $19 million to $17 million) than he was making, but probably more than any other team would have given the aging player. 

Stern was paid handsomely for making the jump from broadcast radio to satellite. His deal is valued at $100 million annually. That's a big figure, but keep in mind that it's for the cost of the show. In other words, his sidekicks and crew get paid out of that as well. Even after that, though, Stern is still being compensated tens of millions a year.

Sirius XM has indicated that it wants to rein in some of its programming costs, although contrary to some reports, it has not said Stern would necessarily have to take a pay cut. It's only natural that Sirius XM wants to save some money. Its stock is trading at under $2 a share, and after merging with XM it has removed one of its biggest competitors. 

"At the time of the merger, we were in many long-term contracts," said the company's chief financial officer, David Frear, at the UBS Global Media and Communications Conference earlier this week. "As they come up for renewal, we'll have the opportunity to get more favorable economic terms there." 

When Stern joined Sirius in 2006, it was groundbreaking, sending a signal that satellite radio was for real. Other stars have followed, including Rosie O'Donnell, Dr. Laura Schlessinger and Oprah Winfrey. It also has a slew of specialty music and sports channels. The service has grown from 600,000 subscribers before Stern joined to almost 20 million now.

Though Stern may not be as crucial to Sirius XM as he once was, like Jeter he is still a vital cog in the machine. Without him, Sirius XM loses not only his followers, but all the free publicity he generates for the company. Is he still worth such a huge paycheck? That's up to the two of them to decide. Stern is brassy on the air, but he is also pretty savvy behind the scenes, and he has a sense of loyalty for Sirius XM boss Mel Karmazin. The two have worked together for decades.

Stern does have some options. A return to broadcast radio is unlikely given that he's probably gotten used to swearing whenever he wants. But Stern has a big-enough following to give going truly solo serious consideration. Stern could launch his own subscription radio show on the Internet and would easily find backers.

That scenario may seem intriguing, but it comes with lots of risks. For starters, much of Stern's audience listens to him in the car on their way to work. While it's not impossible to get streaming Internet content in the car, it's also not as easy as pushing a button. There would be heavy marketing expenses for any new venture. There is also no guarantee that all of Stern's fans would follow him. A chunk went to Sirius, but a lot of the rest just found someone else to listen to on broadcast radio.

There has been speculation about Stern doing some sort of deal with Apple and its iTunes service. But  Apple does not usually pay directly to talent. Stern could sell shows on iTunes and keep a big chunk of the money, but again anything that takes away the live element to his show, or is on a platform that not all his listeners can enjoy together, is a big gamble. It's also not clear that he could make any more money from either approach than what he's making now.

Like Jeter, Stern is probably worth the most to his current employer. If he's offered a new deal for less money, perhaps his producer Gary "Baba Booey" Dell'Abate will take one for the team.

-- Joe Flint

Related post: Gary Dell'Abate talks about life as Baba Booey.

Photos: Top: Howard Stern. Credit: Getty Images. Right: Derek Jeter. Credit: Marcus Donner / Reuters. Bottom left: Mel Karmazin. Credit: Jonathan Fickies / Bloomberg.

 

The Morning Fix: Big bucks for 'Big Bang'! Weinstein Co. makes splash at Toronto. Reality bites on broadcast.

After the coffee. Before wondering why Fashion Week snubbed me.

Reality bites. The Wall Street Journal uses the overhaul of Fox's "American Idol" to check in on the state of the reality TV biz. Heading into the fall season, the WSJ notes that the five broadcast networks have scheduled 14 hours of reality shows, the lowest number since 2005. Of course, in fairness, a lot of reality shows usually come on in mid-season to replace new comedies and dramas that didn't work. Also, although broadcast may be backing away from reality shows, the story doesn't note how huge they've become on cable. TLC, MTV, Bravo and dozens of other channels are basically reality-show factories these days. As for "American Idol," we're all still waiting for Fox and the producers to announce Steven Tyler, the Aerosmith singer, and performer Jennifer Lopez as the new judges. Actually, does anyone care anymore?

Big paycheck for "Big Bang Theory." Deadline Hollywood has the details on the new contracts for the stars of the CBS hit "The Big Bang Theory." Most interesting was how Warner Bros. TV, which makes the show, managed to get breakout star Jim Parsons to take the same deal as his co-stars. Initially, the Emmy winner had been holding out for a bigger deal, but Warner Bros. played hardball. The raises come in the wake of Warner Bros. selling repeats of the program to TBS. In other words, this is the reward for the last few years as much as it is a raise going forward.

They're back! The Weinstein Co., apparently trying to move on from founders Bob and Harvey Weinstein's unsuccessful effort to buy back Miramax from Walt Disney Co., has been making a splash at the Toronto International Film Festival. According to Variety, the Weinstein Co. picked up North American rights for a British coming-of-age comedy called "Submarine," its second purchase after springing for "Dirty Girl." Lionsgate has also been busy as it and specialty subside Roadside bought U.S. rights to Robert Redford's "The Conspirator," which is from new Chicago Cubs owner Joe Ricketts

Brother, can you spare a dime? Veteran movie banker Clark Hallren, who left JPMorgan last year to create Clear Scope Partners, has a grim financing forecast for the movie industry. In an interview with the Los Angeles Times, Hallren, who worked on the initial IPO for DreamWorks Animation, said "it's a good time not to be a banker." Why? Well, Hallren notes that foreign banks are not doing as many deals and the risks in the movie business have skyrocketed.

You say show, I say advertisement. An advocacy group is going after Nickelodeon, charging that one of its new shows is nothing more than an advertisement dressed up as a kids cartoon. The show, "Zevo-3," premieres on Nicktoons next month (actually the day after Hub, a new rival kids channel from Discovery and Hasbro, launches) and is based on characters that were created for a marketing campaign by the shoe company Skechers. The Campaign for a Commercial-Free Childhood has sent a complaint to the Federal Communications Commission asking the agency to stop Nickelodeon from proceeding with the show. The FCC does have rules regarding advertising and kids programming, but Nickelodeon parent Viacom counters that although the characters of the show may have been inspired by the ads, it is not violating any government regulations. More on the skirmish from the New York Times.

Missing the point. The Hollywood Reporter has a story Thursday declaring that "fat is making a comeback in Hollywood" and suggesting that we can all "forget about" the super-skinny actresses that fill just about every show on broadcast and cable. What the story doesn't note is that most of these shows are reality shows about losing weight and that their overall message is that there is something wrong with the people on the show. Although obesity is a real issue, many of these shows are just exploiting people in the hopes of ratings. In other words, Hollywood is not suddenly embracing people who you can actually still see when they turn sideways.

Inside the Los Angeles Times: Sirius XM Chief Executive Mel Karmazin said he is confident that Howard Stern will sign a new deal with the satellite radio broadcaster. MGM got its seventh (that's right, seventh) forbearance on its debt payments. Lucas Cruikshank is building an empire with his Fred Figglehorn character.

-- Joe Flint

Follow me on Twitter because I said so: Twitter.com/JBFlint

Clear Channel wants to kiss and make up with Howard Stern

When Howard Stern left terrestrial radio for satellite radio in 2006 he did his best to blow up his old relationships. Not only did he blast his former employer, CBS, and its boss, Leslie Moonves, regularly on the air, he also got into a legal tussle with radio giant Clear Channel Communications after it stopped carrying his show in the wake of a Federal Communications Commission crackdown on indecency.

Now though, Stern is toying with coming back to FM radio and Clear Channel might be the ones rolling out the welcome mat. BusinessWeek is the latest to weigh in on a story about Stern's next move and quotes Clear Channel radio head John Hogan saying "we would be the most logical company for him to optimize his exposure and financial return." It might be the only choice as well. Although Clear Channel is willing to forgive and forget about its rough past with Stern, CBS is less likely to want him back. Stern was particularly hostile to CBS and its chief executive, Moonves. That continued when he went to satellite radio as well.

Stern was one of radio's biggest stars when he bolted for Sirius in 2006. His exit from so-called free radio was a big blow not only to CBS, but the industry overall. Stern was carried on almost 50 radio stations across the country. His show generated almost $100 million in advertising revenue and an additional $50 million in cash flow for CBS.

He was also one of radio's highest-paid personalities. At CBS, Stern's compensation was around $30 million (that included revenue from the show's syndication deals). When he went to Sirius, his paycheck hit the stratosphere. His package called for compensation of $100 million a year. That figure included salaries for his cast and crew but it still allowed him to take home about $50 million a year.

Sirius is run by Stern's old boss, Mel Karmazin. The two have been in business together for more than two decades, so one would think it would take a lot for Stern to jump back to FM radio when his contract is up at the end of this year.

Speaking at an investor conference last month, Karmazin gave a tongue-in-cheek preview of how his talks with Stern will go.

“It will start with Howard feeling that he is working too hard and doing too many shows and not making enough money,” he said, adding that the response will be "we want you to do more, and get less money."

The terrestrial radio industry was already struggling when Stern left at the end of 2005 and the business has only gotten tougher. It is hard to imagine that Clear Channel would spend anything like what Karmazin spent to lure Stern to Sirius. Of course, considering that Sirius stock now trades for under a dollar, it is also unlikely that Karmazin can afford to keep Stern at his present salary much less give him a raise. 

Money may not be the only factor Stern considers when deciding his future. The plus side of Stern moving to satellite was that it freed him of scrutiny from the government. He can swear and have all the porn stars on his show that he wants. 

The flip side is that since going to satellite Stern has fallen off the cultural zeitgeist. He does not get the attention from the mainstream media and the general public that he used to command when he was on FM radio. And that's not something you can put a price tag on.

-- Joe Flint

Photo: Howard Stern. Credit: Stephen Lovekin / Getty Images