We have been following the contract negotiation saga between Howard Stern and SIRIUS XM Radio Inc. (NASDAQ: SIRI) quite closely and for some time. Last night we even hit a 23-day countdown. This morning came an announcement from Howard Stern that he will be staying at SIRIUS XM and that the new term is for another five-year period. As we suspected, the rumors that Stern would sign an iTunes exclusive with Apple Inc. (NASDAQ: AAPL) were false.
Terms of the contract were not disclosed and we do not expect the terms of the contract to be disclosed. We even pondered that SIRIUS CM could file for confidential information to prevent that from being released.
It seems that Stern was the first peg because he noted that his staff have not yet signed on, but he expects that most will sign on.
There are probably going to be fewer shows as we have suspected as much of the negotiations were said to be around the workload and the schedule. The new deal is said to ‘more flexible,’ again without details.
The prior 2006 contract was always thrown around as being a deal worth a total of $500 million. That figure is of course up for debate after you include stock.
For shareholders, this does matter. Otherwise there would not be such a large gain. SIRIUS XM shares are up almost 8% at $1.42 on almost 5 million shares with more than an hour until the market even opens.
JON C. OGG
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