XM Archive

By Relmor Demitrius -

Howard Stern will soon announce his plans for beyond 2010.  His current five year, 100 million dollar per year contract with Sirius XM Radio (NASDAQ:SIRI) will expire on December 31^st, 2010.  Will he re-sign with the company that made him the highest paid radio or television performer in history or will he part ways?  His comments so far seem to indicate he is indeed staying.  Regardless of his decision, it is important to explore and weigh his options from his point of view and from Sirius XM’s.  Is any decision or path disastrous or a huge negative for either party?  Are there options best suited for both?  Here are the most logical choices and scenarios.  With each choice comes with its own set of consequences and effects for both parties.

The most obvious outcome is Howard gets his way and works less hours. He will probably try to work less hours while making the same salary as his current contract.  Since he got four days a week last time, I think this time he tries for three.  Current comments he has made in the last few months on air seem to indicate he is at least contemplating a three day work week.  What would happen if he re-signed and worked less days? His fans would care and the show would suffer.  Just too much away time.  Now this cast of characters is away from each other more than together.  Four days off, three days on.  If Mel Karmazin (CEO of Sirius XM Radio) allows this to occur, expect his audience to drop off even more.  Now you’re asking your fan base to “go find other entertainment” two days out of the work week rather than one.  Already he is away a lot of the time.  Jim Rome works 5 days a week.  Rush Limbaugh works a full week.  Michael Savage clocks in to put out a show every day.  Howard Stern apparently doesn’t feel it is necessary.  He is special.  That’s fine.  His listeners will learn to do without him more and more.  This is a positive for the company, as it directs frustration and malaise toward Howard and his show, and none at Sirius XM or management.  This scenario overall would be beneficial to the company but not ideal short term.  I think Mel gets some degree of a salary drop out of Howard if he wants to work less time.  He may also even let him start the show an hour later, as well.  Another huge mistake by Howard and disappointing to his fans.  It is a morning show after all on the east coast.  Half the country will be at lunch when the show is finally getting going.  This once again would direct frustration at Howard and not the service.

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