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In a ruling handed down on Monday, a New York state court found that subscribers the company had acquired through its merger with XM should not be counted in determining whether to award Stern a series of bonuses between 2004 and 2010.
Sirius signed up Stern’s production company One Twelve in 2004 and agreed to pay five separate bonuses of $75 million if subscribers numbers exceeded a series of internal milestones.
While Sirius and Stern agreed one of these milestones — 2 million additional listeners — was exceeded, the parties disagreed about whether they broke the other milestones of 4, 6, 8 and 10 million new listeners.
According to Stern and his agent, the numbers should take account of the 9 million subscribers Sirius picked up when it acquired XM in 2008.
Judge Barbara Kapnick disagreed, noting that Stern’s contract had a separate section contemplating the merger. The section promised Stern $25 million if the merger went through — an amount he collected while his agent, who was also party the lawsuit, picked up an extra $2.5 million for the merger.
Judge Kapnick found the contract clearly intended that the merger customers should not be counted towards the bonus. She agreed to Sirius XM’s request to throw the case out with prejudice.
The decision was first reported by the Hollywood Reporter.
Here’s a copy of the decision:
Sirius Stern Suit Denied Copy