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Sirius XM Banks on Howard Stern

By Rick Munarriz – Jan 30, 2014 at 3:15PM

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Sirius XM Radio gears up for tomorrow's Howard Stern Birthday Bash.

Howard Stern fans will be in for a treat tomorrow, and not just because it will be the first time that they hear the popular morning show host live on a Friday. 

Sirius XM Radio (SIRI -2.65%) is presenting Howard Stern's Birthday Bash -- broadcasting live from New York's Hammerstein Ballroom -- starting at 4 p.m. The next several hours will feature celebrity appearances and other antics.

In a neat twist, Sirius XM isn't limiting the event to Sirius subscribers. It will make it available to everyone -- around the world -- for free at its website.

This may seem odd given the geographical limitations of Sirius XM's fleet of satellites and the premium nature of satellite radio. The company is giving away its most magnetic event in ages, and it's doing so in territories where it can't offer its service.

However, perhaps the biggest reason this may seem odd is that Stern's already more than eight years into his contract. It expires at the end of next year, and there aren't any indications that Stern wants to stick around after 2015. If anything, most of his words and actions suggest he'll be long gone come 2016.

"I've got two more years here," Stern said back in April. "I plan to give the company my two best years, and then I'm going to go off and somehow develop another company."

To be fair, Stern's comments were made at an inopportune time. The New York state appeals court had just sided with a trial judge's earlier ruling to throw out a $330 million lawsuit spearheaded by Stern. His original contract included stock awards based on the number of subscribers that Sirius landed following his arrival, and his camp wanted the award to include the XM accounts that were acquired. 

Stern's career has also gone in a new direction since he was tapped as a host for television's America's Got Talent. He had already been gradually scaling back the number of live shows a year he was doing on radio. In short, it's hard to imagine Stern on Sirius 24 months from now. 

That may be just fine for Sirius XM. It spends a lot of money on Stern -- nearly nine figures a year -- and his departure will save the media giant some serious programming and content costs. The key is how many subscribers Sirius XM will lose when Stern ultimately moves on, and that's something that may make Friday's bash a bit awkward if it winds up wooing more new fans for a celebrity that it's unlikely to still have around after the end of next year.

Then again, why bash the Bash? Nobody likes a party pooper.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Sirius XM Radio. 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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