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Just the other day, Howard Stern was lashing out at a Sirius XM (NSDQ: SIRI) exec in the kind of language you can only get away on satellite radio, pay TV or the internet. Today, he used the same time to put his fans — and Sirius shareholders — out of their misery by announcing that the “king of all media” would be the king of satellite radio for another five years. The new deal includes exclusive mobile rights for the first time; until now, Stern has been MIA on Sirius apps.
Stern noted in the press release that soon followed (which carefully led with his being the first to report the news), Sirius had about 600,000 subscribers when he signed up; now it has 20 million. Sirius had about 3 million subs by the time Stern joined in 2006, and quickly showed a boost that largely could be attributed to his signing. But the huge increase isn’t all due to Stern: Sirius merged with XM in 2008 for a total of 18.5 million subs. Stern is part of the Sirius package; XM subs have to pay for an add-on to get his two channels.
But Stern played pied piper for Sirius in the days when satellite radio was a blip, drawing his loyal fans to the network, and remains one of the most important (I know, know, to Stern fans he is the most important, the only, etc.) draws. It would have been interesting to see just how many subs Sirius lost if CEO Mel Karmazin hadn’t managed to re-sign Howard.
The money details are sketchy. Stern’s original jaw-dropping $500 million, five-year deal contract came in 2005, when Sirius and XM were competing and paying megabucks for big names who they thought would be big draws. By 2007, estimates put the total programming spend at more than $6 billion. Stern’s deal was five times that of NASCAR. At the time of the signing in late 2004, Sirius said it would take just 1 million subscribers to cover the costs of the deal.