Viacom Getting Sirius?

Is Howard Stern's rowdy radio show becoming the next hot spot for stock trading tips? Last week he beat Sirius Satellite Radio (NASDAQ:SIRI) to the punch by announcing that the two would team up come 2006 to produce three channels of no-holds-barred content before Sirius could issue a press release to make it official.

Yet now some investors are dissecting comments that Stern made later, suggesting that his deal with Sirius didn't necessarily mean an end to his relationship with his friends at Viacom (NYSE:VIA).

That birthed two juicy rumors. The first was that former Viacom COO Mel Karmazin would be joining Sirius. That makes sense. He left Viacom four months ago, and while his name has been tossed around as a possible successor to Michael Eisner at Disney (NYSE:DIS), only Karmazin knows whether he is truly interested in the Mickey Mouse gig or whether he's willing to wait until next year for Disney's board to arrive at a decision.

The second rumor is a bit more radical. However, it was more widespread and had even the New York Post wondering whether Viacom would just flat-out acquire Sirius.

A merger would make sense on the most basic of levels. Viacom stands to lose the most with Stern's departure. It's not just that the show is highly rated in its syndicated markets; it's more dire than that. If Stern's switch to Sirius causes a migration away from free radio, Viacom's Infinity Broadcasting will be dealt a brutal blow.

Sirius and XM Satellite Radio (NASDAQ:XMSR) spent billions to get their protected satellite streaming services off the ground, so if a company wants a financial stake in this promising sector, it pretty much boils down to scooping up one or the other. However, each company is already valued in the billions, and that lucrative potential, plus recent investor enthusiasm, means it would probably cost billions more to close a deal.

So why is no one bringing up a third option? Come 2006, Sirius and Stern will need more than word-of-mouth to promote the show to those who have yet to subscribe. That's where Viacom's many cable properties like Spike TV, MTV, and Comedy Central make sense to keep Stern visible beyond the realm of satellite radio. What kind of deal is possible? Will it involve Viacom taking some of the money it made in unloading Blockbuster (NYSE:BBI) -- a cash cow with a bleak future -- and funneling it into a minority stake in Sirius, a cash drain with a bright future?

Perhaps. But Viacom swallowing Sirius whole? I don't think that Viacom can afford to be that hungry -- or that Sirius is that anxious to be served on a plate.

Longtime Fool contributor Rick Munarriz likes the move by Sirius in landing Stern and doesn't feel that it is overpaying for his services. He owns shares in Viacom and Disney.