Isn't it peculiar how a two-week suspension becomes an outright canning once money is involved? Buckling under the pressure of bolting sponsors, CBS
That's just how it goes in the entertainment business. You can be sure that Isaiah Washington would be off Grey's Anatomy if GLAAD had rallied around a similar tack concerning his use of an inappropriate slur -- and if Disney's
I'm not going to take sides, at least not on a site you come to for financial enlightenment. You're obviously welcome to leave me on the fence as you come to your own conclusion. As an investor, my interest in this story floats over to the obvious questions like:
- Where does Imus go now?
- Will XM or Sirius come calling?
- Will the migration move the needle?
The last resort
Retirement is always an option, but I doubt this is the way Imus wants to go out. A couple of days ago, I argued how things would have played out differently on the wider -- and wilder -- canvas of satellite radio.
It seems as if we're heading in that direction. Few terrestrial radio stations would be up for taking on Imus at this point. Satellite radio doesn't seem to mind. XM
CNNMoney editor Paul R. La Monica disagreed with me in his Media Biz blog yesterday. He argued that satellite radio may not have the same advertiser influence as mainstream radio, but that angered subscribers could still vote with their feet. He also noted that the timing would be awful, as the signing of Imus by either company would ramp up the already tight regulatory scrutiny on the Sirius-XM merger.
I agree with La Monica's second point to a certain extent, but I think he's off the mark with the first point. People haven't voted with their feet in the past. When Opie and Anthony landed on XM, it was XM that landed more net new subscribers than Sirius. When Stern debuted on Sirius less than two years later, it was Sirius that took the lead.
Stern is a polarizing radio star. You either love him or hate him. What has that meant for growth at Sirius? The service had less than 700,000 subscribers when it made the fall 2004 announcement that Stern would be coming over in January 2006. Today, it's topped the 6 million subscriber mark.
A lot of that growth is clearly from Stern fans, but surely some of the new ears feel that Stern is vile. They've gone with Sirius because they have fallen for the commercial-free radio stations, Martha Stewart Living Omnimedia's
Over at XM, there may not be a whole lot of overlap between Oprah Winfrey radio fans and the Opie and Anthony loyal listeners, but that's the point. Satellite radio is supposed to be about a plethora of choices.
If you're a DirecTV
When you've got 130 to 170 station slots to fill, you're going to cover a lot of ground in satellite radio. You see it on a political level. The progressive Air America is just one channel away from the conservative America Right. Over on Sirius, you've got SIRIUS Patriot and SIRIUS Left just two clicks apart.
Signing up controversial personalities hasn't alienated listeners. It has simply expanded the audience base.
The urge to merge
I do have my doubts about the XM-Sirius deal clearing regulatory hurdles. Signing up Imus, a polarizing force in Washington long before this month's slur, could be seen as taunting.
But wouldn't it be silly if it came to that? There are so many bigger fish to fry in deciding whether this union should be allowed to proceed, that it's ludicrous to think it could boil down to a single talent recruitment issue.
More importantly, XM and Sirius have to be planning for the possibility that the merger won't go through. If Tom and Jerry go back to playing their antagonistic cat-and-mouse games, the one that arms itself the best during the courtship has the better chance to come out ahead in the future.
Imus may not have drawn the radio numbers of Limbaugh or the terrestrial-strength Stern, but his exit leaves a displaced audience waiting. CBS may find itself booking a younger, cheaper, lesser-known replacement (and risk the same fate it has had in trying to fill Stern's void since last year), but a controversial Imus will still move the needle for Sirius or XM.
Is it right? That's not the point. Just as money was the root of his firing from terrestrial radio, money will be the root of his hiring by Sirius or XM. My bet is that the hungrier XM will seal the deal, broadcast the press conference where Imus apologizes to help ease the storm, then unleash him again behind the subscriber curtain.
Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story, save for Disney. The Fool has a disclosure policy.