SIRIUS XM Radio Inc. (NASDAQ: SIRI) may have had a stellar rise over the last year after the satellite radio monopoly got back on its feet.  The last month has been a time of caution despite the SIRIUS XM data numbers showing growth and after it had raised guidance.  The hang up lies around the Howard Stern contract, and the thirty-day countdown just started this morning.

Howard Stern has what is publicly thrown around as a $500 million contract.  What that will be ahead is unknown, assuming there is an “ahead with SIRIUS XM.”  Stern’s last show of the year is set for December 17 on our last look, but more importantly his contract is set to expire on December 31, 2010.

Stern has been credited for many of the subscribers into SIRIUS XM, particularly at the beginning stage and it was a selling point along with the sports exclusives.  The company’s 2009 revenues were $2.47 billion, and Thomson Reuters has estimates pegged at $2.83 billion in total for 2010 and $3.09 billion in total for 2011.

CEO Mel Karmazin is probably trying to convince Stern and his team that the prior deal is no longer monetarily feasible.  Howard Stern is probably telling Karmazin that a Howard-less SIRIUS XM is a far less valuable entity and that his departure will create a subscriber exodus.

Calculating Howard Stern’s value in the new post-meltdown lower growth era and troublesome times for media is hard to do.  SIRIUS XM lists the ‘goodwill’ on the balance sheet as being $1.834 billion of the total $7.23 billion in assets.  How much of that goodwill is attributed to Stern is up for debate.

Shares closed at $1.39 this Thursday and the 52-week range is $0.56 to $1.61.

The saga continues.

JON C. OGG

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