Think what you may of Don Imus. He makes money for CBS (CBS) and MSNBC (GE)(MSFT). Very few people have seen his contract, but it may be that the networks cannot simply pull him off the air for good without paying him and releasing him to work elsewhere.
Several sponsors have already cancelled their advertising from his show after his racist remarks about the Rutgers women’s basketball team. At this writing those sponsors include GM (GM), Sprint (S), Procter & Gamble (PG), and Staples (SPLS).
If things get bad enough CBS may have to let Imus go, no matter what it costs in revenue. The issues with national advertisers may be too great. MSNBC has already made the decision to stop running Imus permanently.
Howard Stern went to Sirius for two reasons. One was money. The other was to get the FCC off his back. The public airwaves are regulated. Satellite radio is not, at least to the same extent when it comes to programming.
Imus has been a radio star for over 30 years. His morning audience on MSNBC is almost as large as the figures for CNN during the same time period. It is rumored that his show on WFAN brings in more advertising revenue than any other radio show in the country.
Sirius (SIRI) and XM (XMSR) will need a little something extra to keep their subscriber bases growing, whether they merge or not. Mel Karmazin, who will lead the merged company, was Imus’s boss at CBS.
With the problems that satellite radio has, it is likely that it would embrace Imus with open arms.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Top Gaining Stocks
Top Losing Stocks