Howard and Sirius still stuck with each other
So much for the drama. Howard Stern announced this morning that he signed a new five-year contract with Sirius satellite radio, ending a protracted negotiation. He did not indicate how much the contract is for, only saying that it is “very fair.”
The end of this contract will be a different sort of drama since Stern also said that this will be his last five years in radio. Whether that means he’ll pursue other media opportunities or choose to retire altogether is anyone’s guess. No matter what he decides I’m sure that Stern will milk the mystery for all it’s worth.
Of course, this puts to bed the absurd rumor that Stern was contemplating a $600 million contract with Apple to distribute his show exclusively on iTunes. However, we still don’t know the terms of Stern’s new deal with Sirius, although eventually investors are going to want to know the details. There has been some speculation that a new deal would involve a little less cash and more stock, though the stock isn’t exactly performing its best. Nevertheless Sirius (SIRI) stock was up over 6% this morning following the news. I’m guessing that’s all the bump the stock is going to see unless it turns out Sirius got some real cash concessions in this contract.
We don’t know yet whether Sirius decided that a Stern-less future was too risky, or whether Stern realized that there are likely no more lucrative options than staying put at Sirius. Status quo is obviously the safest option for both parties, especially as Sirius closes in on celebrating the milestone of 20 millions subscribers. Losing Stern and triggering a possible exodus of possible hundreds of thousands of subscribers would have certainly marred the occasion.
