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