Would Sirius XM Fire Howard Stern?

A bombshell this week is rocking Sirius XM Radio. It could have been worse.

Jul 7, 2014 at 10:05AM

It was a rough weekend for Opie and Anthony cohost Anthony Cumia. Sirius XM Radio (NASDAQ:SIRI) fired the shock jock on Friday after he posted racially charged tweets. Cumia's Twitter rant came after he was attacked by an African-American woman in Times Square.

It's a delicate situation, naturally. The allure of Cumia for satellite radio is that he speaks his mind, courting controversy along the way. But in a time when even billionaire basketball team owners can get booted for racially insensitive remarks, it's not as if Sirius XM could have merely looked the other way. Cumia went on to delete the tweets over the weekend, but by then the damage was already done. 

Sirius XM is in a can't-win situation. If it had kept Cumia on the air, it would have resulted in a backlash from advertisers, some listeners, and vocal on-air personalities. But firing him is naturally going to prove incendiary to fans of the show who ditched terrestrial radio for premium satellite radio because it's where freedom of speech is supposed to be tolerated. No matter which way it would have turned in the unfortunate incident, it was going to be out a few subscribers.  

What would happen if it weren't Cumia who went on the tirade? What if it were Howard Stern ranting away with expletive-dipped racist tweets? Would Sirius XM have let him go? 

This isn't an easy question to answer. Cumia was a defining personality during the formative years of satellite radio, but it's clear that Stern is the top draw to premium radio. Some angry listeners may be serious about canceling the service if Cumia stays off the air, but Stern getting the boot would result in a wave of defections. However, Stern going off in a similar manner -- as unlikely as that may seem -- would have also been a bigger news story. 

In the end, the aftermath of Cumia's firing paints Sirius XM in a different light. It used to be the first responder of notoriety, running into the face of controversy instead of running away from it. How else do you think Cumia or Stern found their way to Sirius XM in the first place? But now that Sirius XM has matured and commands an impressive audience of 25.8 million people, it can no longer be the renegade it used to be. It has to abide by social norms. Cumia is out, and under a similar scenario, Stern would be too.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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