How can Sirius XM
Mac Greer: What is the single biggest game changer that would really take that stock from the $1 range? What's the biggest game changer for Sirius XM?
Ryan Saghir: There are two options. One is to go with the content side. Sign on a big-name personality in an exclusive fashion that has a huge following on the radio --- moving over from terrestrial radio to satellite radio, following the same exact Howard model. And to execute that in a wonder, flawlessly perfect way. That's one technique. And the other would be to really revolutionize how they do distribution, whether it be online, whether it be mobile, something that is really, really going against the grain in terms of their traditional way of thinking. My gut feeling says they'll probably go with the latter because it's safer, but I think the former has the most impact.
Greer: And in talking about the former, I mean what other personalities pack the same punch? Is it a Glenn Beck, a Sean Hannity, a Rush Limbaugh? I'm trying to think of someone who could have the same reach as a Howard Stern.
Saghir: Rush Limbaugh would be the gold prize. He's obviously very polarizing. He's hated by many, loved by many, and he has listeners. That sounds just like Howard Stern, and that's exactly the type of person that they should bring on board. Rush Limbaugh in an uncensored fashion would be amazing for a lot of their listeners, and I think a lot of people would pay to hear that.
Greer: But I'm guessing they would have to pay Rush more than they paid Howard.
Saghir: (Laughs). Of course, I don't think Rush would ever go in with anything less than Howard. And that's the conundrum. I think the issue is they paid Howard so much that it's almost impossible to beat that deal. And any self-respecting radio host who is very, very profitable and has a good listener reach wouldn't want to demote themselves below Howard because they would always be compared to Howard.
Greer: Can Sirius XM afford Howard Stern once his contract comes up at the end of the year?
Saghir: I hope so. I mean I think it would be a big hit toward the reputation of the company without Howard Stern. I think Howard Stern really is the standard-bearer for them. Aside from bringing in subscribers, Howard Stern brings in a lot of his own equity when it comes to an advertising potential. And the average consumer who may not have Sirius XM still looks at Sirius XM as having Howard Stern. And without Howard Stern, they lose a lot in terms of that exposure. ... But I mean, let's face it, XM survived just fine without Howard Stern. You know, XM did a very good job, but ultimately, XM ended up being bought by Sirius. So that's telling as it is. And I think Howard definitely holds a lot of value, and I think Sirius XM should do everything they possibly can do to keep him on board.
Greer: Any sense of how many listeners would leave with him?
Saghir: I think that depends on whether he decides to retire or if he decides to move on to a competing service. If he decides to retire, then he'll ride off into the distance and everyone will hang their heads in sadness, but if he decides to start up something competitively, there could be a significant hit. What that number would be, it just all depends on how he decides to execute it. If there's one thing we do know, Howard executes flawlessly. So if he decides to do something competitively, watch out.
Greer: And do you want to hazard a guess as to what he's going to do?
Saghir: I'm willing to wager a good guess that he's going to re-sign with Sirius XM, that it's going to be less days a week, it's going to be a lower-priced contract, probably not too far off what he's currently making. But it's going to be less, and it's going to be less days a week as a result. He's going to have a less strenuous schedule, but less money as a result.
Greer: And a final question. Three years from now, Sirius XM, is it a stand-alone company still, or does it get acquired by Liberty
Saghir: I don't think a Google, Apple, or any of the tech companies; I don't think they want to do anything with that. I think Sirius XM will remain stand-alone. They'll continue to chug along and really fine-tune those dials to make sure they remain profitable as much as possible. And that's, I think they're just going to put their heads down and work as hard as they can toward true attainable goals. So three years from now, they're still a stand-alone company and they'll be growing still.
Motley Fool co-founder Tom Gardner thinks Sirius needs to Get Sirius About a Split. What do you think the game-changer for Sirius is? Post your thoughts below.