Stern Is Synonymous With Sirius

Sirius XM Radio (Nasdaq: SIRI  ) fans can thank New York Post's gossipy Page Six column for giving Howard Stern more leverage in contract negotiations.

According to the report, Stern is the top choice to replace Simon Cowell after this season's American Idol. "It might be possible," he told radio show listeners yesterday. "We'll see."

Stern is in the final year of his five-year deal with Sirius XM Radio. It's only natural for the magnetic Stern to draw interest. The morning show host has previously confirmed that even terrestrial radio operators have opened the door for his return to traditional radio.

None of this seems likely, though.

For starters, let's go over the reasons why Stern and Idol aren't exactly a perfect fit.

  • Stern has shown an interest in scaling back his work commitments. This doesn't sound like the kind of approach that would fly, given all of the traveling that Idol judges do during regional auditions.
  • Will Stern be as ruthless as Cowell? You bet. However, Stern also crosses lewd and sexist lines that would make him more than merely villainous on the show. A selectively polarizing figure can influence viewer voting sentiment -- damaging the show's credibility.
  • After consistently badmouthing and testing the mettle of censors and regulators during his terrestrial run at what is now CBS' (NYSE: CBS  ) Infinity, can we really expect a prolonged tenure, given the mostly live nature of the show airing on News Corp.'s (NYSE: NWS  ) Fox?
  • Stern has a quick wit and a wicked tongue, but what about his ear? He should have no problem discerning between good and bad crooning during the early rounds, but does he have the skills to split hairs between great singing and merely really good singing when it matters most?

None of this matters, for now. Stern is simply benefitting from one more potentially interested party to make sure that he can milk the best contract possible out of Sirius XM CEO Mel Karmazin.

Karmazin seemed to have all of the leverage when Sirius completed its merger with XM in late 2008. Stern wouldn't have XM bidding against Sirius for his services. It has been suggested that Stern can strike out on his own with a premium-streaming model. Now that Apple (Nasdaq: AAPL  ) and Research In Motion (Nasdaq: RIMM  ) have tens of millions of smartphone subscribers tethered to the Web, it's certainly a niche where Stern could command a healthy living. However, all of the chatter of Idol or terrestrial radio seems farcical at this point.

Is there really any doubt as to where Stern will be come next January? All of this noise may cost Karmazin -- and Sirius XM shareholders -- a bit more than they were hoping to pay in securing Stern for a few more years, but it's going to happen.

Where do you see Howard Stern broadcasting from in 2011? Share your thoughts in the comments box below.

Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the stocks in this article. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.


Read/Post Comments (33) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 09, 2010, at 1:20 PM, willi632 wrote:

    LOL...., Stern will cost shareholder's LESS.

  • Report this Comment On February 09, 2010, at 1:26 PM, Simpsonic wrote:

    He is a vulgar man (which is why he is hidden on satellite radio) and he would scare away viewers from Idol. The only people that follow him enjoy his vulgar behavior, and IF he was to go to Idol, I would stop watching, and would never let my kids watch him.

    He is abusing the media for contract negotiations and needs to be pushed out on the street. He has taken away millions from investors and has not given them anything in return. He continues to bash sirius and is shooting himself in the foot, doing so.

    His departure would bring in more listeners and I am sick and tired of him making it an issue everyday. The question is not being asked by EVERYONE. It's only being asked by those who want to distract buyers from the plethora of good news for SIRI. He has done nothing for investors except steal our money. He is old, overrated, vulgar, and not loyal to the investors, nor to his followers. If he leaves, I say let the door hit his ego out to the street.

    He is done, and I believe if he does leave, more listeners would sign up knowing that their children don't have the chance to listen to his vulgar mouth, let alone watch him without his vulgar tongue on Idol.

    Please let him go so we can end this everyday circus and move on. Sign Conan, Dump Stern - and his single minded listeners that say they only listen to sirius/xm because of Stern. There is way to much content on Sirius, and listeners know it. Sirius/XM is all that and more without the clown who thinks he is KING of All Media. He is more like King of ALL CLOWNS.

  • Report this Comment On February 09, 2010, at 1:42 PM, Austin77478 wrote:

    Simpsonic, you basically said it all. No body is sine-qua-non. Sirius will move on if he does leave, and might even come out better, in terms of bottom line.

  • Report this Comment On February 09, 2010, at 1:44 PM, Austin77478 wrote:

    No body is sine-qua-non. Sirius will move on if he does leave, and might even come out better, in terms of bottom line.

  • Report this Comment On February 09, 2010, at 2:41 PM, elvoid wrote:

    Like MANY of Stern's listeners, I am college-educated, six-figure-earning, and over fifty. Long live Howard Stern on Sirius/XM; and a ba-ba-booey to y'all!!

  • Report this Comment On February 09, 2010, at 3:02 PM, GPDchicago wrote:

    Simsonic & Austin....Stern's loyal fan-base is somewhere between 2M and 3M listeners of the Sirius subscribers. And the nice thing with satellite radio is that Sirius knows EXACTLY who is listening, when and for how long. Let's put the numbers at 2MM subscribers and you'll see that Stern is well worth the $100MM per year he's being paid. $180/yr for 2MM subscriber brings $360MM in annual revenue. This doesn't include the advertisement $$ that his stations bring or the on-line subscription $$.

    I am an example of an original Sirius subscriber (going on 5 yrs) who would cancel my Sirius subscription the day after Howard's show ends.

  • Report this Comment On February 09, 2010, at 3:05 PM, milanooo wrote:

    please let him leave...don't hold him back. let him take his dirty, ugly hair with him. I noticed that no one mentions his name except MF. I am starting to think that they get paid everytime he gets his name mentioned.

  • Report this Comment On February 09, 2010, at 3:16 PM, snowpol wrote:

    I subscribed with Howard. I bought stock because I believe in the company. If Stern leaves, I will sell my stock and I will cancel my subscriptions. I'll bet all you Stern haters listen to him more than I. Hey Simpsonic, did you say Sirius has too much content? What does that even mean? And Ba-Ba-Booey to Y'all!

  • Report this Comment On February 09, 2010, at 3:17 PM, seriousman wrote:

    Don't let your personal feelings, pro or con on Stern influence what you think is going to happen. The first issue is money. The way for Stern to maximize money is to stay with Sirius (which desperately needs him- they lose one million subscribers that's 750 million dollars over five years). AND at the same time go on regular radio with a carefully edited and delayed version of the show- which he can get millions for. That takes the pressure off of Sirius to pay him mega bucks. He gives lip service to working less- cuts his hours down to 7-10, maybe his days to three days a week- which will keep those million Stern fans plugged into Sirius.

    Anyone who think he would do Idol doesn't know this guy. He is super neurotic, germ phobic, anti social, and has travel paranoia. He also would be bored with that show after the first hour.

    If it was 10 years ago he would go independent on the Internet, but he does not have that kind of energy at age 56.

  • Report this Comment On February 09, 2010, at 4:57 PM, DenimAdept wrote:

    I don't care about Stern. I stopped listening to him years ago. Since Stern joined Sirius, the stock has gone from $6 or so down to a nickle and bounced back to $0.85. If Stern left, would the stock price really go down?

  • Report this Comment On February 09, 2010, at 5:21 PM, ItAintCool wrote:

    milanooo wrote:

    please let him leave...don't hold him back. let him take his dirty, ugly hair with him. I noticed that no one mentions his name except MF. I am starting to think that they get paid everytime he gets his name mentioned.

    And by "nobody" you mean, every news and media outlet in the United States. Obviously you must not be able to access any other news or media site on the net besides Motely Fool, because if you did, you'd know that he's been the talk of the town on every news, financial and entertainment site out there. Love him or hate him, he's news. Perhaps you stick your head the ground, like the ostrich, between readings of MF, so you don't know what's going on in the real world.

    Seriousman is right: Don't let your personal feelings about Howard get in the way of the financial realities. He single-handedly saved Sirius Satellite radio and forced a merger with XM that now saves the company many millions in expenses. He has more than paid for his salary (which is a misnomer because his salary is not just for himself, the 500 million also goes to the other cast & crew members - of course Howard does take the Lion's share of it).

    If you don't like his vulgarity, it is certainly your right to change the channel. But don't proselytize to others that enjoy him that everbody can't listen to him because you personally don't like it. It's why SIRI-XM has more than 150 channels to choose from, everybody can find their own preference. Go to the channels you enjoy and skip the ones you don't. He attracts a lot of subscribers to SAT radio (estimates are in the 5-6 million range). Driving him out will drive many subscribers away, ones that the SAT radio industry won't ever recover.

    If you honestly think that more people will subscribe to SIRI-XM if Stern leaves to replace the ones he takes with him, then you're delusional. Potential subscribers who hate Stern can join the XM package right now without even hearing a whiff of him on the radio (because he's an added paid option to XM). So why aren't people flocking to the Stern-free XM package at this time? It's because they never had any intention of subscribing in the first place.

    If you're a shareholder who dislikes him, getting him to leave is a case of cutting your nose to spite your face. If you're just a Stern hater who is ranting here on the forum, without any financial stake in SIRI, why don't you go to the Yahoo entertainment forum where they're currently debating his usefulness to American Idol. I'm sure there's a bunch of pre-teen girls and mid westerners who will support your opinion.

  • Report this Comment On February 09, 2010, at 5:26 PM, heidilove wrote:

    the only people who listen to Stern are dirtbags like him, I think we have enough of those dirty people. Let him go, he is a loser like the rest of them listeners.

  • Report this Comment On February 09, 2010, at 5:41 PM, SCWinehound wrote:

    You want lewd, check out Jason Ellis on Faction. Not only is he raunchy, he is damn funny. Watch out Howard, Jason Ellis is getting ready to eat your lunch!

  • Report this Comment On February 09, 2010, at 7:06 PM, langco1 wrote:

    sirius is one of 2010 big name bankruptcys....

  • Report this Comment On February 09, 2010, at 7:49 PM, BigVincent wrote:

    If sirius pays Howard more than $80million per year I am going to walk with what I made in the stock.

    Get rid of Howard and get rid of Oprah winfrey save sirius $150million per year!!!

  • Report this Comment On February 09, 2010, at 7:54 PM, Austin77478 wrote:

    Langco1, first of all, get your spelling right. Did you miss out on the ride?

  • Report this Comment On February 09, 2010, at 7:59 PM, Austin77478 wrote:

    1

  • Report this Comment On February 09, 2010, at 8:49 PM, ItAintCool wrote:

    heidilove wrote:

    the only people who listen to Stern are dirtbags like him, I think we have enough of those dirty people. Let him go, he is a loser like the rest of them listeners.

    Yay! I'm a dirtbag! Thanks Heidilove. I guess there are millions and millions of us dirtbags out there going to work and raising families, paying taxes and spreading our filth. Some of us dirtbags are even CEO's of fortune 500 companies and top grossing celebrities. By the way Heidilove is "dirtbag" and "dirty people" a codename for some other group of people you're really trying to hint at, you know, just like Mel Gibson does?

    And Langco1 is a troll (or spambot)who creates new aliases for himself/herself and posts that Siri will go bankrupt in 2010 over and over. He/she/it was doing the same thing in 2009 and we can see how well that went for him. Your new name is now Langco1Douche.

  • Report this Comment On February 09, 2010, at 9:47 PM, Angelmos wrote:

    "Stern Is Synonymous With Sirius"

    Are you sirius?

    Stern fans used to represent a big portion of the Sirius 4 millions subscribers when he was signed.

    Using baseball analogy, Stern was like the cleanup hitter who drove in the most RBI on the team. Sirius is now like the 2009 Yankees with several great hitters, great pitchers and little competition.

    Unlike a few years ago, during desperate time competing with XM, Sirius should look at all options of how to spend $500 millions wisely.

  • Report this Comment On February 09, 2010, at 10:35 PM, warrenrial wrote:

    Stern becomes a judge on American Idol, that will give me reason not to watch. He should team up with Oprah.

  • Report this Comment On February 09, 2010, at 10:37 PM, warrenrial wrote:

    Stern becomes a judge on American Idol, that will give me reason not to watch. He should team up with Oprah.

  • Report this Comment On February 09, 2010, at 10:47 PM, frame66 wrote:

    I think Howard will stay. He is a radio guy and that is what he loves. All the attention is on him and he has all the time to express himself on the air. Remember, this is Satellite RADIO and not music only. He is 50% of this company. Music, people can get with their CDs or ipods, talk shows are a different story. His program has content which brings a lot of subscribers. If he leaves...SiriusXM will die or it will take three times as much to get out of the whole that it is in. I guess what I have to say is GUGLE,GUGLE,GULGLE.....WUAGGGGG and Hey Now !!!

  • Report this Comment On February 09, 2010, at 11:46 PM, FM5 wrote:

    After all this stern noise im going to have it put a buy rating on this stock, To a, buy all you can , before it hits a $1.00.. you know when cramer plays the baby cry sound, that will be you, if you dont buy now ...

  • Report this Comment On February 10, 2010, at 1:28 AM, SalStockBroker wrote:

    Very typical that people who have never heard one second of the show or own any Sirius stock have an opinion on Howard staying with Sirius.

    Howard is Sirius!!! Before Howard signed with Sirius they had a total of 300k subscribers and when Howard arrived they had several million. They now have close to 20 million. The XM merger which allowed them to double the subscribers would have never happened without Howard. XM was the dominanat power in Satellite Radio for several years until Howard arrived at Sirius and began to drive subscribers away from XM who offered sub par content. (Opie and Anthony and Oprah)

    XM was on the verge of collapse and would have been gone by now if it wasn't for Sirius CEO Mel Karmazin stepping in and calling for a Satellite Radio Merger and his thought behind that was instead of struggling through years of advertising and competition Mel decided long term it would be better to merge and focus on Terrestrial Radio as its primary competition.

    When the merger was finally approved after a year of corrupt politicians discussing a Monopoly, Sirius did merge and had to pick up a ton of debt that XM had aquired over the last few years. By the way many of the XM executives who did such a great job(sarcasm) were immediately booted by Mel. Unfortunately time was against Sirius and the time it took to merge and the collapse of the car industry effected new subscrribers intake and hence caused negative effect to the stock.

    The stock has been increasing over the last year because the Liberty Media bailout and also better subscriber results and many car companies are offering free subscriptions. The stock will continue climb as the economy and car dealers continue to show progress.

    Back to Howard he will return to Sirius except in a limited capacity. Howard has been talking about continuing to work just with more time off. I see Howard moving to Friday, Saturday, Sunday, and Mondays off. So he will work a 3 day work week and also get more vacation time. I see Sirius making a $225 million 3 year contract. Saving roughly $25 million a year and will continue to keep the current subscribers and continue to add new ones.

    You ask why would Howard go for this? And why would Sirius go for it?

    Well Howard would get his wish of less of a work load and still be among the top paid radio personalities. Not only that after joining Sirius the company gave Howard close to $250 million in stock. After the stock fell to sell it would have been insane so I can gurantee you he still is holding much of that stock. Knowing Howard he would rather be the determining factor in whether his stock climbs and regains its high marks.

    Sirius can't afford to lose Howard. Heres the problem if Howard leaves within 30 days sirius would have a loss of 1 million subscribers who are die hard Howard fans and only have Sirius for him. Then within 90 days a loss of another 2 million and within a year a loss of another 3 million. So approx a total of 6 million subscribers. Now you say 6 million is a reasonable amount to lose to save $100 million a year. You are wrong!!! Because 6 million customers equal close to billion dollars a year in revenue and thats not including advertisement someone like Stern can drive.

    So keeping Stern in any capacity means profit for Sirius which means good things for Stock Holders.

  • Report this Comment On February 10, 2010, at 9:09 AM, wolfwuf wrote:

    I'm already sick of Howard Stern as a topic...keep him, let him go who cares...just stop talking and writing about it Its just not that interesting or important.

  • Report this Comment On February 10, 2010, at 10:27 AM, BigVincent wrote:

    SalStockBroker I think you have no clue how many listeners really listen to Howards show. Everythign you said and mentioned is nothing but pure speculation.

    The statistics claim only 1 million customers would leave, a short term rise inchurn would happen and sirius/xn would still save a little over 5million per year just getting rid of him and losing 1million customers. You see sirius operates at a loss for teh first million subs, its not a money making platfrom if you lose money for the first 1million subs.

  • Report this Comment On February 10, 2010, at 3:38 PM, roserc wrote:

    This is a tough one. If we were talking about the Howard Stern Show in 2005, I would say sign him.... but lately the show is just not that funny.

    The worst thing that could have happened was SIRI playing the 'History of Howard Stern, Pt 3' over the holidays. All it did was make me realize how good the show was in the past, and how much it has worsened over time. It seems like Howard is getting lazy....

    I worry that if he does get signed the show will continue to decline. I woudl love to see the numbers of listeners this year compared to 4 years ago....I just don't think the number of listeners who would ditch SIRI are as large as people might think.

  • Report this Comment On February 11, 2010, at 1:40 PM, langco1 wrote:

    sirius will be among the big name bankruptcys for 2010...

  • Report this Comment On February 12, 2010, at 1:25 PM, norm1834 wrote:

    Howard is crazy like a fox---him on Idol would

    be great, but he has no intentions of shifting--

    But he is shifty, this is just a rather transperant

    way to pressure Sirius/XM to give him a fatter

    contract.

  • Report this Comment On February 12, 2010, at 2:29 PM, infomaniacal wrote:

    It is not an either or situation. Stern can negotiate his terms, and the benefits to doing both far outweigh any one deal.

  • Report this Comment On February 12, 2010, at 2:30 PM, infomaniacal wrote:

    By the way... Stern actually started a show like this on his radio program well before Idol. He would be able to do this because he has.

  • Report this Comment On February 12, 2010, at 2:51 PM, ETFsRule wrote:

    I know the people at Idol are desperate to fill Simon's vacant seat, but Stern is a terrible choice. I agree that he is too vulgar, and he doesn't have the music knowledge to seperate the contestants in the later rounds.

    What they should do, is go after another record producer with a strong personality, who can do Simon's job and also keep the show interesting. My top choice: Rick Rubin!

  • Report this Comment On February 13, 2010, at 2:21 PM, USNHR wrote:

    I haven't ever susbscribed to sirrius and when they bought XM I immediately canceled my service. If Sirrius got rid of Stern, I might think of buying stock and getting satelite raido again.

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