Media
Why It Was Critical for Sirius XM to Hold Onto Howard Stern
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When Sirius satellite radio announced it had signed shock jock Howard Stern to a five-year, $500 million contract in 2005, the company’s stock jumped 16%. Stern signed another five-year deal with Sirius XM Holdings Inc. (NASDAQ: SIRI) in 2010 for a reported $400 million. Tuesday morning, SiriusXM announced that Stern had signed an agreement to continue the satellite radio show for another five years. In addition, Sirius and Stern also signed a 12-year deal that licenses to the satellite radio firm Stern’s audio and video library built up over a 30-year career.
In typical Sternian mode, the radio host said:
I happen to think that [SiriusXM’s] best days are ahead. So, if you are not listening to SiriusXM and The Howard Stern Show, then you are really more like a zombie, a rotting corpse monster, living half a life, deadened and blackened inside. It’s as if you were still watching black and white television while shopping in actual stores on your way to the post office to fax a memo.
There were rumors that Stern would skip to Apple Music or Netflix or even produce his own podcasts instead of re-upping with SiriusXM. But the satellite radio company needs him a lot more than he needs them, and so the deal got done.
SiriusXM shares traded up 3.8% in Tuesday’s premarket session, at $4.15 in a 52-week range of $3.31 to $4.20. If the stock posts a new high Tuesday, SiriusXM ought to pay Stern a bonus.
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