In a public sign that negotiations between Sirius XM Radio (Nasdaq: SIRI ) and Howard Stern are getting testy, the satellite radio provider's biggest star blasted his company's CFO during yesterday's show.
Speaking at the UBS Global Media and Communications Conference, CFO David Frear made comments that The Hollywood Reporter interpreted as an indication that Stern may have to take a pay cut to keep his show going on Sirius.
"Why would I have to take a pay-cut," Stern said during yesterday morning's show, as retold by Forbes' Lacey Rose. "Oprah's out getting the Kennedy Center honor and I've got the CFO announcing to Wall Street that I have to take a pay cut. Never mind getting respect from the industry. I want respect from the company."
I heard the entire conference's webcast. Twice! I didn't get that out of Frear's response at all. Yes, at one point he did mention that Sirius XM was locked into many costly long-term contracts at the time of the merger. He said that there was an opportunity to achieve better economic terms. However, at no point did he single out Stern as a pay-cut candidate.
Of course Sirius XM is going to want to lower its programming costs whenever it can. Why else did it consolidate many of its music channels? Wasn't one of the unspoken merits of the merger between Sirius and XM that it would no longer have to bid against itself for content?
Stern shouldn't be insulted, and I'm guessing that he may have read The Hollywood Reporter's incendiary headline without checking the conference's actual webcast. Either way, this incident seems to indicate that Stern and Sirius XM aren't on the same page, as we count down to Stern's final live show a week from tomorrow.
It's a shame, because they do belong together. Surely they can work something out, at the very least for a year or two. This would be a good time for Stern to offer up smartphone streaming as part of his contract. One of the reasons that Sirius XM's streaming app for Apple (Nasdaq: AAPL ) , Research In Motion (Nasdaq: RIMM ) , and Google (Nasdaq: GOOG ) Android phones hasn't taken off is probably that Stern's show isn't available for contractual reasons. Now would be a good time to rectify the situation.
We'll see how things go over the next few days. I'm still hoping that Sirius XM will be able to pull a rabbit out of its hat in time for its Paul McCartney concert on Monday night to celebrate to celebrate hitting 20 million subscribers. If not, the next obvious announcement would be during his final show next Thursday, milking the drama until the very end.
A deal doesn't have to be announced even then. Stern is slated to take a two-week holiday break, and negotiations may continue then in order to have him back in time for a sixth year come January.
Drama, tension, and mind games over the radio? H.G. Wells would be so proud.
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